Dealer Fees Skyrocket

Dealer Fees

California is no stranger to legislative change, especially when it involves a lucrative industry like automobile sales. Currently, the state’s Senate Bill 791 is stirring the pot with potential changes that could significantly increase dealer fees on car sales. If this bill passes, buyers might see the document processing fees jump from their current limits of $70-$85 up to $500, or 1% of the vehicle’s purchase price, whichever is less. This marks a potential rise of up to 600% – a hefty increase, indeed.

The Background

It’s interesting timing for such a proposal, especially following substantial political contributions from a dealer lobby group. Critics argue these lobbyists have heavily influenced the bill’s momentum. Out of all state senators, just one, Henry Stern, dissented. Stern has pointed fingers at car dealers for not earning public trust, claiming this fee hike is a questionable reward for behavior not in the consumers’ best interests.

Dealer Justifications

Dealers advocate that the increase is necessary due to rising operational costs. They argue that this would allow them the same flexibility other industries have in passing costs onto consumers. However, this logic is met with skepticism. Vehicle registration documents have a uniform filing cost, regardless of the car’s make, model, or price. Critics suggest this fee structure is less about covering costs and more about squeezing more profit out of buyers.

Lobbying Efforts

The California New Car Dealers Association (CNCDA) plays a significant role in this legislative push, investing about $2.9 million into political donations. They argue the new fee structure reflects a fair business practice. Opponents see it as a maneuver to benefit dealers at the cost of buyers, a sentiment expressed by Rosemary Shahan of Consumers for Auto Reliability and Safety, who firmly believes this move only benefits car dealers.

Possible Impact

Should Senate Bill 791 be enacted, vehicle buyers in California would have to brace for its financial implications. With car prices already at a high, and additional fees potentially marking up vehicle costs even more, it will be interesting to see how the market reacts if the bill becomes law. California’s history shows it’s a trendsetter; whatever happens here could very well influence other states to follow suit.

The Driving Experience

While this bill is about the sales process and fees, it inevitably ties back to the driving experience. When the cost of entry increases, consumers might re-evaluate which vehicle offers the best bang for their buck. Does one go for a reliable mid-range SUV or a high-end sedan? This decision could become more financially tactical if fees soar.

California’s policy landscape may seem complex, but it’s crucial to remember at the end of the day that every twist and turn impacts the daily driver more than anyone else. As the Golden State maneuvers through these legislative roads, every car enthusiast should remain informed and prepared for the possible journey ahead.

Photo Credit: CNCDA