Lead Sponsor: Senator Jamie Eldridge
Summary: Massachusetts car buyers are currently being charged so-called “document preparation” fees that can range as high as $400 for processing paperwork and storage of documents. In February, the Massachusetts Office of Consumer Affairs and Business Regulation conducted a state-wide survey, finding that 70% of the car dealers it surveyed charged these fees, and that the reasons given for the fees appeared to be questionable. Generally “document preparation” fees are not revealed until the final stages of a negotiation over the price of an automobile. This bill would, therefore, allow a car dealer to charge one “Document Preparation Service Fee” associated with all preparation and processing of all documents related to the sale. However, the bill would prohibit the dealer from representing that the fee as a governmental fee or as one required by government and would cap the total Document Preparation Service Fee at $75.00.
Why This Matters: In a February 2012 press release from the Office of Consumer Affairs and Business Regulation, 128 of the 180 dealerships surveyed charged “document preparation” fees that ranged $45 to $399 for reasons that are questionable, unsubstantiated and often negligible. These exorbitant fees are unregulated by Massachusetts, while at least seven other states, including California, New York, Texas, and Washington, cap document fees at $100 or less. Because car buyers are often unaware of these fees until the final stage of negotiations, prohibiting the dealers to present the document fee as a governmental fee would allow for potential car buyers to negotiate these fees.
What this Bill Would Do: This bill would allow car dealers to charge one fee, entitled the “Document Preparation Service Fee,” that encompasses all preparation and processing of documents that include but not limited to sales contracts, financing documents, certificates for vehicle purchase, documents to issue or transfer certificates of title, and other sales and finance transactions. The dealer would be prohibited to represent the Document Preparation Service Fee as required by the government, and the total Document Preparation Service Fee could not exceed $75.
You can view the full text of the bill and track its movement here.