What do they mean when they say a price and they “Plus Fees”?

In California, about the only thing that isn’t taxed when you buy it is food.  An there are plenty of people who would argue about that since there are taxes paid by the producer, distributor and seller of the food that are certainly worked into the price we pay.  Let’s talk about buying a car though!

When you buy a car in the State of California, you pay sales tax.  The Sales Tax is based on the address at which you register the car.  You will be asked to provide a physical address (not a PO Box) when you buy a car from a reputable dealership such as the Subaru and Mitsubishi dealership in Fresno where I work.

Even if you live in the mountains and no mail comes to your physical residence, that physical address is what the California DMV will use to determine how much sales tax you pay when you buy a car.  So, in Fresno, CA where I live and work, you pay 8.225% tax on everything you buy and it is collected by the merchant who then forwards the money to the State of California.  In my role as Internet Sales Manager at the Fresno Subaru store where I have customer from all over California, I have seen sales tax as his as 10% in the case of Fremont, CA.

Many people get all huffy and insist from me they want only the “Out the Door” price.  They are afraid that the car dealer is going to stick a bunch of extra fees on the price.  Don’t worry folks, it’s pretty cut and dried.  When you buy a car we are going to add

  1. Sales Tax (based on your jurisdiction of residence)
  2. Document Processing Fee ($80 – charged by every dealer in California) (in Nevada it’s $595-$895)
  3. Any other fees required by the State of California or you local County or State in order for us to register a car in your name.

The fees we charge (for the government) are computer generated via a hookup to the state which also knows any fees your City or County may charge.

Here is an example of some fees charged on a recent transaction of mine:

fees

These were added to the purchase price of a 2017 Subaru Outback that sold for $33,468.  By the way, this is just the fees!  The purchase lived in a foothill town in Madera County and the sales tax based on their home address was $2,683.84.

Two final notes;

  1. Does the dealership profit from any of these fees?  No.  We simply pass the money along to the tax collector.
  2. When you want to know the “Out the Door” Price, remember, it depends on where you live.  This same car in Fresno, CA would be charged sales tax of $2,752.74

Happy car shopping!  Remember, hit me up any time for the Out the Door price on any car in my inventory… but remember to tell me your address too.  Just click “Ask Ed” on this page and I’ll get an email.  Thanks for checking in.