State lawmakers consider raising dealer fees by hundreds, fueling consumer concerns over higher car costs and dealer lobbying influence
- Lawmakers in California could soon allow dealers to charge hundreds more at purchase.
- Document processing fees could jump from $70-85 to $500 if a new bill becomes law.
- The group pushing the change has spent millions on political donations in recent years.
It’s never boring in California politics, especially when car dealers and lawmakers are playing footsie under the table. This week, the state’s legislation took a sharp turn with near-unanimous bipartisan support for Senate Bill 791.
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The proposal would escalate vehicle dealer fees from a longstanding $70-$85 cap for non-PIP and private‑industry partnership (PIP) dealers respectively to either 1 percent of the car’s sale price or $500, whichever comes first. That’s a staggering increase of nearly 500 to more than 600 percent. Conveniently, the bill follows a wave of donations from a dealer lobby group that poured millions into lawmakers’ coffers across the state.
In fact, only one senator voted against the bill. That man, Henry Stern, argued that “The car dealers haven’t earned the trust to justify this major increase in junk fees. Bad behavior shouldn’t be rewarded.”
According to Cal Matters, his words reference automakers who recently lobbied the Federal government to revoke California’s waiver to set its own environmental standards. Beyond that, though, it’s clear that many dealers in the state are happy to mark cars up whenever they feel like it, even when automakers condemn the practice.
The Justification, or Lack Thereof
Dealers say that they need to increase fees because the cost of doing business is going up. They argue that other businesses can pass along costs to the consumer at will, but they have to get state approval to do so. Why they would need the fee to follow the percentage of a car up to $500 seems questionable, since the registration documents surely cost the same to file regardless of make, model, and MSRP.
Anthony Samson, the California New Car Dealers Association’s lobbyist, told lawmakers that, “If we believed we could simply recover our costs and the price of the vehicle, I assure you that we would not be here today asking for your support on this measure.”
The California New Car Dealers Association (CNCDA) lobbies the government for exactly this type of thing. And they do it quite openly. The Digital Democracy database indicates that the CNCDA spent at least $2.9 million in recent years simply to donate to lawmakers. “This is the opposite of saving money for people,” said Rosemary Shahan of Consumers for Auto Reliability and Safety. “There’s no two ways about it. It’s just benefiting car dealers at the expense of car buyers. That’s it.”
The bill is still working its way through the legislative system. When and if it becomes law, things will only get more expensive in the Golden State.