Monday, March 09, 2015

"Electronic Filing Fee" (aka "Dealer Fee")

After a decade of authoring newspaper columns, blog posts, and hosting radio talk shows, I like to think that I’ve contributed somewhat to Floridians’ awareness of the “Dealer Fee”. For those who still don’t know what a “dealer fee” is, it’s extra profit to car dealers that they take from you by adding an amount to the price of the car they advertise or quote you when you ask for the price. The Florida legislature has addressed this issue by making a law that car dealers must include their “dealer fee” in the price of the cars they advertise. There is no limit on the amount a car dealer can charge for dealer fee and there is no regulation on what the dealer can name his dealer fee. Most other states do have limits and do require that that the dealer fee be identified by name. 

Some of the other names for the Dealer Fee are Doc Fee, Documentary Fee, Notary and Closing Fee, Administrative Fee, Handling Fee, Dealer Prep Fee, Dealer Pre-Delivery Fee, and Dealer Services Fee. Oftentimes dealers use more than one dealer fee. I’ve seen three dealer fees by different names on the same buyer’s order. The dealer in this illustration has two, “Dealer Services and “Electronic Filing Fee.” These two dealer fees total $1,597.99. Bear in mind that this is additional price mark-up, profit to the dealer in addition to the price you were quoted. 

A few years ago with the advent of data processing technology, companies were formed that offered a new service to car dealers. These companies take the raw data from the car sale transaction and automatically register and title the car that the dealer sells. Up until this time, car dealers had been performing this task in-house and paying someone called a “title clerk” for this. The new automated service saved car dealers lots of time and money and today every car dealer now uses this service. The cost to the dealer is minimal, about $10 per car sale. These data processing companies take the data directly from the car dealers’ computers when they process the sales transaction and almost instantaneously register and title the car. I would estimate the dollar-savings in time and the clerical cost to be over $100 per car sale. My dealership sells over 400 new and used vehicles per month and this service is saving me about $40,000 monthly! 

What most businesses would do with this windfall savings in expense would be one of two things. (1) Pass the savings along to the customer to increase the sales volume and/or (2) take the $100 expense reduction to immediately increase the profit. 

Unfortunately, that’s not enough for most car dealers. Almost all car dealers in Florida took this cost savings, called it an expense, marked it up, and charged it to their customers! Only some dealers disclose this on their vehicle’ buyer’s order as Florida law requires, disclosing that this charge represents “profit to the dealer”. Florida law considers the “Electronic Filing Fee” just another dealer fee. Soon dealers realized that this windfall “cost savings” to them could be multiplied thousands of times by marking it up and charging their customers. The “beauty” of the electronic filing fee (aka e-filing fee) is that it sounds/looks like it is the charge for the dealers registering and titling your car. Remember that in the past this expense was absorbed by the dealer and the companies that automated this for only $10 per transaction represents a $100 cost savings! The example that you see in the illustration in this article marks up this dealer’s cost of the automated data service by 5,989%! 

Many car dealers do not disclose the fact that the electronic filing fee is, in fact, just another dealer fee. This is illegal but our regulators claim they are understaffed and too busy to enforce this law, or they claim that they aren’t receiving complaints on this issue. If you have paid an electronic filing fee that was not legally disclosed you can access the method to file complaints at this website,


  1. This is a great article, very informative. I was just looking on autotrader and noticed a nice car under market with decent miles only to browse to the disclaimer and find $3,000 (EFF, Dealer fee, NITRO fee, and private tag agency fee)in fees NOT including tax & title all of which being bogus and some illegal (according to FLHSMV a tag agency fee is considered misrepresentation, false and deceptive and is subject to dealer license penalties). Where was this dealership located? You guessed it. Florida.

  2. CONGRATULATIONS on being an educated consumer.

  3. So, can you just refuse to pay it? Is it always negotiable because if it's an EFF, it's essentially double dipping? What about a Nitro fill fee for $899? I'm a Costco member and I get that for free, can I ask the dealership to remove that charge as well?

  4. LB, as a Costco member you're entitled to the Costco price which is a very low price. The dealer's contract with Costco requires that he sell you the car at this price without adding any extra profit to that price. Dealer fees are extra profit and "electronic filing fee" is just another name for dealer fee. Ask to see the official Costco price sheet. The dealer can add only government fees, sales tax and license/registration to this price. If the dealer doesn't agree, immediately contact Costco and report him. They will force the dealer to comply.

  5. LB, regarding the $899 Nitro fee, this cannot be added to the Costco price's a total rip-off. Consumer Reports did a thorough study on the usefulness of Nitrogen and tires and their conclusion was that it is "worthless". That's why Costco gives it to you free. Their other motivation is to cause you to return to them for service which is one of the few things that Costco does that I disapprove of.

  6. I'm sorry, I wasn't clear on my first post. I'm looking at a pre-owned car through a dealer that is not a Costco certified dealership. It's actually a car buying service through my insurance company. The dealership provided my "member price" then added the following to that: dealer svc and handling fee of $700, Private tag agency fee of $150, EFF Fee of $1,500. (wow!), and Nitro fill unlimited for $900 (double wow). I am wondering which of these fees are non-negotiable and which ones I can confidently tell them I'm not paying, and the reasons for not paying. Because I am a Costco member (outside of this car buying transaction) I can have nitro fill performed at Costco so I don't see the point in paying someone else for it, besides, I also agree Nitro fill is useless. Thanks. Sorry for the confusion!

  7. LB, my advice to you is to contact your insurance company and report this car dealer. What they are doing has to be a gross violation of their agreement with your insurance company. Everything you've listed in added "fees" is nothing more than disguised additional profit to the dealer. You also might try speaking to the owner or general manager of the dealership. Oftentimes sales people will try to increase the price of a car that is discounted by plans like Costco, True Car, and insurance companies so that they can increase their commission.

  8. This is an interesting article. You state that many dealers do not disclose the fact that the electronic filing fee is, in fact, just another dealer fee, and that this is an illegal practice. What Florida law supports this assertion? Is there a statute? Administrative Code? I'm trying to gain a deeper understanding of this issue. Thanks!

  9. Florida statute 501.976 is the applicable law making charging a dealer fee without full did closure illegal.

  10. Earl, thank you for such an informative article. I have the following fees listed on a car I am considering buying in Florida.

    Just to make sure I'm clear - which ones are dealer fees? And can any of these fees be negotiated/waived?

    Dealer Fee $799.00
    New License Plate Fee $430.00
    Title Fee $89.00
    EFF (Electronic Filing Fee) $129.95
    Battery & Tire Fee $5.50
    MVWEA $2.00

    Thanks for all your help,

  11. Dear JG,
    The $899 dealer fee and $129.95 Electronic Filing Fee are both bogus fees which are just pure profit to the dealer. Florida law requires that they be included in the advertised price of the car.

    The only sure way to get the dealer to waive these fees is to find another dealer that will sell you the same car at a lower price which compensates for the "extra profit fees" added by the first dealer.

  12. Thank you Earl.

  13. You're most welcome...thanks for reading my blog. :)

  14. Interesting that in shopping for cars this week, noticed that a Florida dealer well known for 'No Dealer Fees' slips in an 'etag filing fee ($130)' and 'delivery prep ($95)'. Granted, those are relatively small, but profit nonetheless.

  15. Dear Mr. Parks,

    Thanks for that information. Will you please share the name of that dealership? He should be reported to the Florida Department of motor vehicles. Electronic filing fees and dealer prep fees are legally dealer fees. They should be disclosed as such, as required by Florida law. Advertising that he charges No Dealer Fee's is totally deceptive and illegal.

  16. From the Sport Mazda Orlando website disclaimer: 'New Vehicle pricing includes available manufacturer rebate and dealer discounts. New Vehicle Prices do not include tax, tag, etag filing fee ($130), pre-delivery service charge ($95) or Dealer Fee ($0). Used Vehicle Prices do not include tax, tag, etag filing fee ($130), pre-delivery service charge ($95) or Dealer Fee ($699). See dealer for complete details.'

    Photos of new cars are clearly bannered with 'No Dealer Fees'.

  17. Dear Mr. Parks,

    You should file a complaint with the Florida of Motor vehicles and the Attorney General. I'll post the link that you can download the complaint forms from shortly.

  18. Mr. Parks, here you go

    I also wrote a blog on filing complaints:

  19. Great article, thanks!!
    Straight from Al Hendrickson Toyota Fl ad on Autotrader.
    And yet they claim to save you "thousands"

  20. Dave, thanks for sharing that advertisement from Al Hendrickson on Auto Trader. You have to hand it to Al for pure "CHUTZPAH". Most car dealers hide there dealer fees but Al actually openly advertises them. He also has higher dealer fees then any dealer in the United States, as far as I know. Somehow, in spite of this. he sells a huge volume of cars... top 10 Toyota dealers in the USA. Needless to say he also makes an OBSCENE amount of money! 😃

  21. Earl,
    I just came across your article. I'm in the market for a used car in pretty good condition. I see the advertised price on their website as:

    "MSRP: $39,480
    Your Savings: $16,485
    Buy Now: $22,995"

    but then an asterix stating: "All prices are before any additional taxes, titling / registration fees, $595 dealer and $108 electronic filing fee"

    I am reading through the Florida Statute that you referenced earlier: 501.976 Actionable, unfair, or deceptive acts or practices

    Do they get to still charge this fee because it's "disclosed" on their site?

    What is my recourse if I were to pursue this or other similar cars?

  22. Unfortunately the Florida law is written to make it easy for car dealers to deceive their customers and this dealer's advertisement is (sadly) legal. Florida law does not specify what a dealer can call his dealer fee. They choose names like "electronic filing fee" to trick their customers into believing its an official government fee. The Florida Auto Dealers Association, FADA, is the powerful lobbying group that influences all laws passed in Tallahassee affecting car dealers. Unfortunately we don't have an equally powerful lobbying group for the consumer in Tallahassee.

  23. So simply stating on their website makes the whole dealer fee/electronic filing fee legal? Or is it something more?

  24. I am from out of state inquiring about a car from PREMIUM MOTORS, 2757 NW 36TH ST, MIAMI via phone. When working on closing I insisted for the amount and breakdown of these "small fees" mentioned.

    Total fees on top of sale price : $2695

    Certificate of Title $906
    License & Reg: $299 (insisted it had to be registered in FL before I took it home)
    EFF: $595
    Dealer fee: $895

    This is my first time buying a car on my own so I told him I would call back after doing some research. After reading this and calling him on it, he won't respond back. Very discouraging. I feel like I should warn people, any suggestions?

  25. I am astonished at the amount of extra fees that get charged. I am looking at buying at used car and in addition to the taxes being incorrect .. my understanding is the extra 1% my county charges is only on the first $5,000. Otherwise, the tax is at 6%.

    "Price excludes dealer fee of $799, tax, tag, title, and electronic filing fee" is what listing on dealer's website states.
    Yet, on my invoice there is a $799 Documentation fee, and Taxable Fees (estimated) of $159.00, non-tax fees of $150.30 explanation what they are! As far as I know, no tax is charged on title transfer, plate transfer and registration which are SUPPOSED to be the only fees... and electronic fee transfer which you have said $10! So, why if all those fees only add up to $128.10 are they charging me - $309.30!?

  26. Price excludes dealer fee of $799, tax, tag, title, and electronic filing fee is what the disclaimer on the dealer's website says.

    But I am looking at the sales contract I got (I'm supposed to buy the car tomorrow) and there is Documentation charge of $799.
    Taxable (estimated) fees - $159.00
    Non-Taxable fees - $150.30

    No description what they are! I know in FL, the tag transfer, title transfer, and registration, and electronic filing fee of $10 (as you explained) all only add up to $128.10 .. so why am I getting changed $309.30 for "unlabeled stuff"? I don't know anything that is taxable!
    Also tax on vehicles in FL is 6% unless you live in a county that has an extra 1% tax (I do), but that is only on the first $5,000! So, my tax was figured wrong, too! Before I buy the car, should I tell them I figured all the fess and want a reduction in price? It equals about $217 .. not a lot, but it will buy me floor mats! LOL

  27. Earl:

    I only wish your dealership sold the car I wanted (different manufacturer) because I would have loved to have dealt with a man of your integrity. I looked at an offer with 799 Dealer fee and 99 EFS (without disclosing that the EFS was just another fee).

    Are destination charges just fees too?

  28. Thanks for the compliment and I’m very sorry you had such a bad experience with the phony fees. The “Destination Fee” should not be added to the price of the car by the dealer BECAUSE IT WAS ALREADY INCLUDED IN THE COST OF THE CAR TO THE DEALER BY THE MANUFACTURER. If the dealer does charge you, you’re paying TWICE.

  29. I was dealing with Kuhn Honda out of Tampa Florida trying to purchase a used vehicle from them.Since I do not live in Tampa I was trying to do the deal over the phone.The vehicle was advertised at $19,976.00 on their website and on numerous other car buying sites.Talking to the little internet sales manager/ con artist the figures did not sound right to me.So I questioned what were the other fees and he said they were dealer fees and that the manager will not come off them but he would ask him anyway to see.Those mystery fees added to a total of $2,847.34.The so called manager took off $100,so it was originally $2,947.34 in extra fees.That's not including my tax ,title and license.H e acted like I was getting a deal because he has never heard of them taking off any of those fees before for any customer.He was just making me feel all special inside.Needless to say I gave him a few choice words and ended up not buying the vehicle.I need a beer!!

  30. rob71, thanks very much for that input. What this Tampa Honda dealer is doing is typical of most car dealers in Florida. The sad thing is that the regulators, legislators, and the Florida Automobile Dealers Association, FADA, all know this is going on. They tolerate it because of the powerful lobbying of the car dealers and the FADA. It’s almost impossible for an Attorney General or a legislator in Florida to be elected without the support of the FADA.

  31. I am looking to buy a used car- same nonsense listed in fine print: Our Used Vehicle Prices do not include tax, tag, electronic filing fee ($130), pre-delivery service charge ($195) or Dealer Fee ($699). Now this disclaimer is not listed on the sales sticker in the car (?used car Monroney sticker). Is this considered deceptive advertising or should I try to play hardball and see if they will reduce the fees (car price is $17000- so the fees are 6% of the price)?

  32. Prashanta, yes this is deceptive advertising because all the "FEES" they are adding to the advertised price are not legitimate government fees but names made up by the dealer to disguise his additional PROFIT. If this dealer is in Florida, the law states that all dealer fees (which is the generic term for these phony fees) must be INCLUDED in the advertised price. Dealer cheat on this by detailing the dealer fees separately in the fine print. In my opinion this is a violation of the law, but the regulators do not enforce this law. I suggest that you simple make an offer to buy the car for a discount of $1,024 and don't argue about the fees. This has a net effect of eliminating the fees even though they stay on the buyer's order. Thanks for the comment and please let me know if it works.


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