When you buy a new car or truck in the Commonwealth of Virginia, there are many steps that go into the final sale. The processing fee is a charge to help cover the complex services and time required to ensure a seamless transaction for you and the dealer. This fee is allowed and outlined in state law and is a key part of the dealership's goal to provide comprehensive, transparent services to all citizens of the Commonwealth.
What's in the Fee?
There are a range of essential and required services that go beyond simply selling the vehicle. These services are designed to protect you, save you time, and ensure your transaction is handled properly. They can include:
- Streamlined Trade-In Process: Handling the complex details of securing titles for your vehicle, including tracking lost or faulty titles and obtaining out-of-state lienholder-held titles.
- Assistance with Paperwork and Titling: Covers necessary paperwork, notary services, and advice on titling options to make sure your vehicle is legally registered.
- Hassle-free Loan Payoffs: Ensures prompt verification and payoff of any outstanding loan or lease balances on your trade-in vehicle, reviews of vehicle history, and assistance in applying for refunds and entitlements due from traded or newly purchased vehicles.
- Working with Insurance: Assistance with notifying your insurance company of your new vehicle purchase, which saves you a step in the process (you are responsible for obtaining necessary insurance).
- Data Security and Fraud Protection: Covers the dealership's continuous vigilance over your personal information to protect against data breaches and prevent fraudulent transactions in your name.
- Payment Plan Consultation: Help in developing and reviewing alternative payment methods, including various lease options, cash, and finance combinations, to find the best fit.
- Simplified Documentation: Covers creation and review of transaction documentation and customer records to ensure proper, clear handling of the sale.
- Ongoing Support and Information: Providing access to information so that customers can receive and understand manufacturer requirements and can obtain warranty, maintenance, and repair services.
**Not all of these transactions will be performed in every sale or by every dealer. These are just examples, and there are many more not included on this list.**
A dealer processing fee is no different from other professional services.
A processing fee is not unique to the auto industry. Many other businesses, such as retailers, attorneys, and accountants, charge fees to perform services for their customers. However, there are key differences:
TRANSPARENT:
Virginia dealers are required by state law to disclose the fee they charge in all advertising and on the walls of their physical business location(s). Additionally, the fee is featured in the Buyers Order that accompanies every transaction.
VOLUNTARY:
The Processing Fee is 100% voluntary for both the dealer and the consumer. Each dealer can decide to charge a fee and how much it will be. Customers can negotiate the fee, compare pricing with other dealerships, or take other steps to ensure the services and fees align with your needs.
TAXABLE:
Unlike other services – such as attorney and accountant fees, tax processing fees, and the like – the processing fee for auto dealer services is taxable. These tax contributions are used to fund transporation and safety in the Commonwealth.
An Introduction to Buyer's Orders
The Buyer's Order is a key document in a vehicle purchase, serving as the official sales contract for the vehicle. It provides a comprehensive list of all associated costs, including the sales price and any added accessories. Virginia law requires that all charges, including any processing fee, be clearly listed as a separate line item on this form. This requirement ensures you have full transparency about what you are paying for and that the dealership is meeting its licensing requirements with the Motor Vehicle Dealer Board (MVDB).
Dealer Processing Fees: Fully Transparent and Voluntary
In Virginia, laws and regulations are in place to ensure you are fully informed about processing fees. No professional service consumer is better informed of fees than a motor vehicle buyer.
Dealers must disclose processing fees to protect you from any surprises.
In Advertising:
The processing fee must be disclosed in all vehicle sale advertisements in 8-point bold font. The Motor Vehicle Dealer Board actively enforces this rule for print, TV, radio, and online advertising.
At the Dealership:
The fee must be posted on a sign in a conspicuous location within the dealership showroom.
On the Buyer's Order:
The fee must be shown as a separate disclosure on the buyer's order, which is the sales contract for the vehicle. This form must be filed with the Motor Vehicle Dealer Board as part of the dealer's licensing requirements.
Existing Regulatory Requirements
To protect consumers, Virginia has enacted laws and regulations directly affecting the sale of cars and trucks. Licensing laws require people and companies in the business of selling motor vehicles to be licensed. These laws regulate dealers and require them to be open during certain hours of business and have a mechanic on duty to help ensure consumers can easily service vehicles. Other laws and regulations related to documentation are intended to guarantee consumers are provided with complete and accurate information on the vehicles they buy. Virginia code is clear about processing fee requirements for dealers, state regulators enforce those requirements, and dealers face penalty for violation.
Get the facts on Virginia's motor vehicle sale processing fees. This document explains the vital role these fees play in protecting both consumers and dealers, ensuring a smooth and secure transaction for everyone. Download it now to understand why these fees are so important for a transparent and efficient vehicle purchasing process.
Contact VADA for More Information:
Don Hall
President & CEO
O 804.545.3004
C 804.350.3926
dhall@vada.com
Anne Gambardella, Esq.
General Counsel & EVP
O 804.545.3006
C 804.658.7444
agambardella@vada.com
Mimi Perka, Esq.
Director, Legislative and Legal Affairs
O 804.545.3028
C 804.484.4972
agambardella@vada.com
**This webpage is provided for informational purposes only is not a substitute for Virginia law or regulation. All laws and regulations are subject to change.**