Legal Question in Consumer Law in Virginia

Processing Fees

Why are processing fees charged at new and used car dealerships and does a company have the right to keep the processing fee if the sales transaction is cancelled by the dealer whom arranged the financing?


Asked on 11/09/04, 11:24 am

2 Answers from Attorneys

Michael Hendrickson Law Office Michael E. Hendrickson

Re: Processing Fees

Processing fees are designed to lower the dealerships' overhead at the expense of the consumer, not too different from such charges as one frequently sees on a monthly telephone bill such as Federal Subscriber Line or other essentially bogus charges which in reality cost the phone company little or nothing at all. The same applies to these "processing fees" which the car dealer charges for getting the prospective buyer's loan application which s/he mostly fills out to the loan company.

As to whether these businesses have a right to retain these so-called processing fees if the proposed transaction is cancelled, as long as there is no legal requirement(and there is none as far as I know) that they return the fee amount to the would-be buyer, I would not hold my breath (if I were you) waiting for them to do so.

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Answered on 11/09/04, 12:51 pm
Michael Stone Law Offices of Michael B. Stone Toll Free 1-855-USE-MIKE

Re: Processing Fees

"Processing fees" are charged because people like you agree to pay them. Go rent the movie, "Suckers" starring Daniel Benzali (see imdb.com). Write them a letter, certified mail return receipt, demanding that the fee be refunded. If they don't, take them to small claims court.

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Answered on 11/09/04, 2:44 pm


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