The thing I most like about getting a bill from a utility company is discovering what new and exciting charges they’ve managed to come up with since my last bill.
I particularly enjoyed first seeing the one called “customer charge” — so ambiguous, so all encompassing, so delightful.
Some retailers in the car industry are equally creative.
Both new and used car dealerships sometimes tack on an Administration Fee or a Documentation Fee. Either way, this is a charge initiated by each specific dealership (new or used) and can run anywhere from $295 to $595 — and beyond.
Most used car dealerships will charge this fee, but not all new-car dealerships. In fact, most automakers try to police this — with mixed results. This creates the situation where dealerships in the same city, selling the same brands, might have different “admin” fee policies.
One sure thing about admin fees — buyers hate them.
Extra fees are one thing, but what infuriates customers even more are when these fees are only brought up during the paperwork stage.
“When you sit down and see that it has been added to your last negotiated price, you can always step back from the table,” says Carl Compton, executive director and registrar of OMVIC.
“If you feel it’s not worth it, or not comfortable with it, restart the negotiations.”
The Ontario Motor Vehicle Industry Council (OMVIC) is the entity that enforces Ontario’s Motor Vehicle Dealers Act. Each province has its own council and respective “dealers act.”
Compton notes that the council is often asked to weigh in on the legitimacy of these admin or documentation fees.
“The only thing we’ve been able to say is that they are almost a tradition in the industry, for dealers to charge customers for some of the overhead fees they have to deal with. You, as a consumer, should expect that it would probably be tacked on. There is nothing mandatory about it… There is nothing illegal about charging admin fees, but there is nothing from preventing you from negotiating them out as well.”
British Columbia, Alberta, Ontario and Quebec all have legislation that requires dealers and/or dealer groups to disclose any mandatory fees — including admin fees — in their advertised prices.
So the take-away here, is to be aware of them right from the get go.
As soon as you step foot on a new or used car lot, ask about any fees that will be tacked on to the vehicle’s price.
Don’t find out about them late in the car buying stage, when you’re already emotionally attached to the vehicle you want to buy, and/or so emotionally drained by the buying process you’ll pay that extra bit, just to make it stop.