California Senate advances bill to increase car buying fee by 600%

Driving the news: California's state Senate overwhelmingly approved legislation allowing car dealers to charge buyers up to $500 in document processing fees, a sharp increase from the current $85 cap.

For context: Senate Bill 791 passed with bipartisan support, with only one senator voting against it. The bill would let dealers charge up to 1% of a vehicle's purchase price for document processing, capped at $500.

Why it matters: The California New Car Dealers Association and supporters of the bill argue the fee increase is necessary because the current $85 cap hasn't kept pace with California's rising business costs over decades.

• Sen. Dave Cortese, who authored the bill on behalf of the dealers association, called it essential for dealers to operate sustainably.

• But critics like Rosemary Shahan of Consumers for Auto Reliability and Safety counter that it's "just benefiting car dealers at the expense of car buyers" and contradicts both parties' promises to lower costs for Californians.

What we're watching: The bill now heads to the Assembly, where Cortese says he's working with the dealers association to potentially lower the fee ceiling to win Governor Newsom's approval.

Outsmart the Car Market in 5 Minutes a Week

No-BS insights, built for car dealers. Free, fast, and trusted by 95,000+ auto pros.

Subscribe now — it’s free.