AutoTrader released a study conducted by IHS Automotive that asked buyers to rank their satisfaction with the purchase process. Find that survey here: 2016 Car Buyer Journey.

Consumers reported spending and average of three hours buying a car, and more than half of that time is spent negotiating and completing the paperwork. We’ve talked about paperwork before, and the importance that you make sure you have the right numbers and the right forms in place before closing.

What this study highlights is that only 57% of buyers of used cars were satisfied with the closing process. That, my dear readers, is awful. Just 65% reported to be satisfied with the interaction with the finance office. BUT, four out of five people were by and large satisfied with the test drive and the interaction with the sales person. Problem is, people don’t usually highlight that part of it in their conversations with friends. The last thing they remember is that closing process, and that part being the worst part, will be remembered long after the satisfaction of the test drive fades.  

You can fix both of these. The closing process doesn’t always lend itself to an efficiency make-over, but you may need to drag it kicking and screaming.  

First, train your finance people better. Second, get rid of those negative, sour-faced, exasperated individuals who make this experience for your customers even worse. Someone just agreed to buy a car from your company, the least you could do as owner or GM is to make sure the next person they talk to is friendly, professional, respectful, and pleasant.
I have seen a lot of “Finance Managers” who used foul or abusive language, smoked in the office, treated the consumers like inconveniences, and just generally pushed the buyers around. I have seen them rudely take personal calls (or text) with someone at the desk, get up to go yell at sales staff. I have even heard this said by a “Finance Manager” to a buyer at a closing, and this is an exact quote: “Stop asking me so many damn questions and just sign the damned forms already.”  

Watch the “Finance Manager” work through a couple of deals, and ask yourself: Would YOU still sign paperwork if you got treated like that? I have heard a disturbing amount of lies come out of these offices, also, which leads us to the next point:

They need to be honest. Sadly, that does not go without saying in this industry. Consumers now have access to huge swaths of information literally in the palm of their hands. Many of them do not actually have to look at their smart phone to realize they are being lied to or that someone is taking advantage of their financial situation. They will sign the papers anyway and buy the car, especially from BHPH dealers, because they feel they have no other options. You’ve got to ask yourself: Will someone who feels trapped or cheated make payments on time? Go back and re-read the Happy Customer entry in this blog.

Make sure that the final closer (person getting the paperwork complete) knows what they are doing. This person or persons needs to be able to explain the paperwork competently. Teach them (or get someone to do this) what all the the phrases and terms mean, and how to explain it to the consumers if they ask questions. Competence and confidence in this person at this closing goes a long way toward smoothing (and speeding up) this process, and that will lead to satisfied consumers. Remember that the more satisfied the consumer is, the more likely they are to refer a friend, and say nice things about you on social media.  

In a future visit, let’s look at how we can take that four out of five sales staff satisfaction and make it nine of ten, or even better.


Be careful when advertising the prices of cars. Most dealers already know that it is a violation of federal law to represent a different Cash Price and a Finance Price.

What many more do not know is that in most every state, if you charge a Sales Fee, this fee must be included in the advertised sales price, or it cannot be charged. Disclosing it separately in the ad is not allowed. It also does not matter if you rename it to try to avoid the requirement.

You also have to be careful about finance representations. Federal law declares that if ANY one of the terms of a Finance Deal is advertised or disclosed to the consumer, that ALL terms of the Finance be disclosed. This is called using “trigger” words or terms. All terms generally means Down Payment, Amount Financed, APR, Payment Terms, and Payment Amount.
What constitutes “advertising?” Quite simply, if the consumer can see/hear/experience it, and it is designed to entice the consumer to interact with the business, it is advertising. This includes even such things as simply putting a price on the window of the car, using a sign-flipper, and any or all other traditional advertising media. Electronic ads include internet websites, postings to sales sites such as Craigslist or Ebay, and emails or faxes. The wording from the federal law is a : “commercial message in any medium that directly or indirectly promotes” a consumer transaction.
Find your state Consumer acts or laws, and read them carefully.  Remember, the Dealer is primarily responsible for the content of the ads, even if those were prepared by someone else. Also look for your state Unfair & Deceptive Trade Practices Act, if it has one. These are called Fair Business Practices Acts in some places.
The NADA published a comprehensive advertising guidebook for dealers. On the internet, search for: NADA Dealer Guide to Federal Advertising Requirements. At the time of this writing, it is available here: Press Release.

As always, remember that the Dealer is responsible for knowing and following the laws. 



I have spoken for years against Dealer Fees. They are also referred to as Doc Fees, Sales Fees, Prep Fees, Closing Fee, etc.

I’m here today to ask you to finally let it go. First, there is a bit of controversy about them. There have been multiple lawsuits filed against dealers concerning the fees, and the dealers usually lose.

First, the word “Doc Fee” is usually short for Documentary Prep Fee. One of the largest lawsuits hinged on this very wording. In most states, the only person who can charge an individual a fee to prepare a legal document is a licensed attorney. Installment Contracts and Bills of Sale are legal documents.

The second issue is that too many dealers and salespeople lie about them. I personally have been told, among other things, that it is:

  • A Federal Tax on motor vehicle sales. 
  • A fee paid to the manufacturers to register the car. (Even used cars.) 
  • A surcharge by the state or manufacturer to dealers who sell vehicles too cheap. 
  • An FBI fee for accessing the Homeland Security database.
  • A fee or tax paid to local county for processing title work.   

Once, I was told it was a bank-loan processing fee. So I asked that it be removed, since I was paying cash. The salesman quickly said he couldn’t, since “Federal Doc Fee Law” said he had to charge everyone. I asked him for a copy of the law, and he said it was “illegal” to show it to customers. 

All of these reasons are complete and utter malarkey. I do not know if the sales people made it up, or was taught to say that by the dealership. I saw through the lies, and anyone else with an internet connection can, too.

Most state consumer laws require that the dealer fee be included in the ad, either as part of the advertised price, or separately stated. Problem is, most dealers ignore this. To be fair, the states aren’t enforcing it yet. But what *can* be enforced is that if your customer has a copy of that ad, he may have a case against you for Unfair and Deceptive Trade Practices. And it wont be just one. Once any decent attorney gets that case, he or she will naturally ask if all the other customers of the dealership were also similarly misled about the pricing. 

A recent case in South Carolina over the fees went against the dealer to the tune of nearly four million dollars. In this case, originally filed in 2006, the trial judge applied a ruling in another similar case and interpreted “closing fee” to mean a “predetermined set fee for the reimbursement of closing costs, but only those actually incurred by the dealer and necessary to the closing transaction.”

Under that interpretation, the dealer had to provide evidence it calculated the cost comprising its closing fee, which it could not do. This case made it all the way to the SC Supreme court. In the SC Supreme Court’s majority opinion, Justice Donald Beatty wrote that because the dealer posted a notice that it charged a closing fee “as a means of reimbursing it for certain overhead costs, the dealer clearly communicated that that the closing fee was intended to be repayment for that which was expended.”
So, what you call this fee or how you represent this fee to the consumer could wind up costing you a lot of money. Also, look at the sheer amount of time on this case, it took nine years to finally come to a conclusion. The attorney’s fees alone would bankrupt most businesses. 
If you are going to charge a Dealer Fee, find out the average for your area, and charge that. 
Another case of note was the Florida dealer who charged a $1500 fee. He then marked his cars down $1000. The state ruled that he violated the Unfair and Deceptive Trade Practices by shifting part of the sales price to the fee, and by refusing to include the fee in the advertised price, was being deceptive.  
Keep in mind that all it takes is one angry customer with an Internet connection and the ability to find the right someone to complain to.