What Is a Processing Fee?

When you're buying a car in the Richmond, Ashland, and Mechanicsville area, you'll need to be aware of the car buying process. Performing research, finding the right car, and scheduling a test drive is one thing, but the actual process can be filled with some surprises that you may not have expected. That's why we're going to explain the processing fee.

The Many Names of the Processing Fee

It's important to know that the processing fee goes by many names. After you've reviewed your vehicle options and decided on model that you love, you'll start the signing process. You'll communicate with the sales rep that helped you find the right vehicle and the appropriate trim level. You'll then begin reviewing the sales contract.

After you've browsed a few pages and looked at all of the figures, you'll notice a miscellaneous dollar figure that may be labeled as a documentation fee, doc fee, dealer fee, handling fee, service fee, or processing fee. This figure is the cost of processing the paperwork and handling the minute details of the sale.

If you've ever purchased a car before, you know one thing is for certain: There's a lot of paperwork. The processing fee covers all of the little overlooked aspects of the deal that you're about to make.

What Does a Processing Fee Cover?

Dealership paperwork is extensive, so making sure all of the t's are crossed and the i's are dotted can be a painstaking process, but they're necessary to purchase a vehicle. The processing fee includes a variety of factors to solidify your purchase, including titling options, verifying loans and customer identity, and creating and maintaining customer records to reference if there's ever a problem or you'd like to continue your business with that dealership.

The processing fee simply covers all of your paperwork. For the deal to be finalized, there's a variety of forms that go along with the normal dealership papers. The associate must provide and prepare power of attorney forms for you to become the official owner of the vehicle. The processing fee also covers the process of notifying your insurance company of your new vehicle purchase.

How Much Is a Processing Fee?

The processing fee vary from state to state. Some states cap the processing fee, meaning that the price of processing can't surpass the state authorized cap. Other states have no caps on the processing fee, and it's up to the dealership's discretion.

The important thing to take away is deciding on your budget before you take the final steps to get the car you want. Make sure that you leave some wiggle room on what you're prepared to spend toward your new car.

Do you have more questions about a processing fee? Contact our team at Richmond Ford Lincoln. We're more than happy to go over the process and paperwork for our drivers in the Richmond, Ashland, and Mechanicsville area.

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Richmond Ford Lincoln

4600 West Broad Street
Directions Richmond, VA 23230

  • Sales: (804) 474-0531
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