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Question & Answer
Question: In a recent issue, you said that fees, such as doc prep fees, that the dealer charges may be finance charges. We checked with our dealers and they told us that they charge these fees to all purchasers and that it is not a finance charge. What do you think?
Answer: I think you are right. When a fee is charged to all customers, cash and credit alike, it is not a finance charge. So, when the dealer charges a doc prep fee to everyone, including those paying cash or who arranged separate financing, the doc prep fee is not a finance charge. However, if the fee were charged only to credit customers, then it would be a finance charge. Checking with your dealers was an excellent idea. You now have documented information that clarifies the status of these fees.
Copyright © 2000 Compliance Action. Originally appeared in Compliance Action, Vol. 4, No. 17 & 18, 1/00
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