Document Preparation

The Documentary Preparation Fee, also known as the “doc fee” or doc prep fee”, is permitted by Massachusetts law to be collected from vehicle purchasers by Massachusetts automobile dealers. The cost is charged to offset the costs incurred by the dealership in processing and retaining the paperwork associated with a sale or lease that are separate from those paid to acquire the vehicle.

The doc prep fee recognizes and reimburses costs related to a dealer’s compliance with federal and state laws and regulations that provide for safety, consumer protection, anti-theft measures, vehicle history checks, notifications, certifications, and official filings among others.

Regulations & Responsibilities..Massachusetts Dealers Take Them Seriously

Dealers must prepare and process the documents on each sale or lease transaction. Collection of the doc prep fee reimburses the costs incurred in doing the following: preparing a Purchase & Sale Agreement, appraisal documents, odometer statements, insurance verifications, etc., as well as storing and archiving documents and the personnel and technology costs associated with such tasks.

Not all transactions involve the same services, but all transactions must meet many legal requirements as detailed in the documents provided to the purchaser. Actual expenses incurred and recovered through the documentary preparation fee, as well as the size of the fee, may vary by dealer, location, and transaction. At the time of this writing, most Massachusetts dealers of like size and volume to this dealer charge a documentation fee of approximately $500 to $600.

Please understand that no portion of the dealer’s doc prep fee is required by or remitted to any state or federal agency. Further, the doc prep fee has nothing to do with the Title Preparation Fee, which is stated as a separate line item on the sales contract. (It is capped by law at $5).

Dealer’s Responsibilities Include:

Check vehicle safety, history, and titles
Provide full condition information on the window label
Discover and disclose accurate vehicle mileage
Check for recalls on used vehicles where required
Complete required forms and contracts that protect your interests
Comply with consumer paperwork laws
File and clear liens
Keep your information private and secure
Fulfill vehicle emissions laws
Pass along manufacturer information, including warranty policies
Distribute state Lemon Law notices
Process rebates on your purchase
Keep you informed of your rights and obligations
Keep important records of your purchases
Purchase required forms and supplies
Maintain appropriate technology to process your paperwork faster
Train staff to carry out laws that protect you
Maintain professional and statutory licenses, and complete necessary education and training sessions, that ensure quality service

Why So Many Forms?

Vehicle transactions have become very complicated, demanding our unwavering attention to detail. Most forms are required to fulfill Massachusetts and federal laws. Others are often necessary for accounting, financing, or manufacturer rebate reimbursement or notification.

Privacy

Dealers must collect non-public, personal information that may be required as a result of processing the sale or lease. They must comply with federal and state laws designed to protect that information once it passes from you to the dealer’s hands.

It’s the Massachusetts Way…

Dealers abide by a strict code of ethics designed to reinforce their commitment to you, our valued customers. Dealers share an interest in creating consumer laws that keep customers’ satisfaction high and the industry healthy. For that reason, MSADA dealer member companies have joined the Legislature and state agencies in creating strict laws regarding vehicle sales.

Peace of Mind…

Massachusetts dealers must comply with strict requirements established by their franchisor manufacturers regarding financial stability, proper dealership facilities, record-keeping and more. Comprehensive professional standards offer you the peace of mind that dealership staff have the knowledge they need to do business the right way.

ON EVERY TRANSACTION, all car and truck dealers must comply with federal and state laws, rules, and regulations specific to motor vehicles, which are implemented and enforced by these federal and state agencies:

National Highway Traffic Safety Administration
Federal Trade Commission
Federal Reserve Board
U.S. Internal Revenue Service
U.S. Environmental Protection Agency
Federal Bureau of Investigation
U.S. Drug Enforcement Administration
US. Customs Service
U.S. Financial Crimes Enforcement Network
U.S. Department of Labor, Occupational Safety & Health Administration
U.S. Immigration and Naturalization Service
U.S. Office of Foreign Assets Control
Federal Highway Administration
Federal Motor Carriers Administration
U.S. Research and Special Products Administration
Massachusetts Office of the Attorney General
Massachusetts Executive Office of Energy and Environmental Affairs
Massachusetts Executive Office of Transportation and Public Works, including the Registry of Motor Vehicles
Massachusetts Department of Public Safety, including the State Police
Massachusetts Department of Consumer Affairs and Business Regulation
Massachusetts Department of Revenue
Massachusetts Department of Labor
Massachusetts Division of Insurance
Massachusetts Division of Banks
Massachusetts Department of Environmental Protection, including the Vehicle Inspection and Maintenance Program