Used Car Buying
Taxes and Tax Preparation
Sales Tax

Can the dealer add their doc fee deputy fee and dealer inventory tax to the sales price in Texas?


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Wiki User
2011-04-22 01:12:05
2011-04-22 01:12:05

Here is another tip. This one is from a peer-reviewed article.

Pass Through of Tax--tax inventory fee

While VIT is actually one component of the dealer's ad valorem tax, state law allows dealers to pass on to retail buyers the unit tax attributable to that sale. The charge on a retail contract for the tax should be disclosed as "dealer inventory tax" and not misrepresented as a charge required by law or as the "buyer's inventory tax." While the VIT charge can be passed on to buyers, the law does not require that a dealer do so. In fact, the law is neutral on the issue, and an attempt to convince a buyer that the tax is a mandatory charge required by law to be added to the contract is incorrect and actionable.

Addition of the tax on the contract is a negotiable item and a dealer can refuse to sell to a buyer who refuses to have it included. Conversely, a buyer can refuse to sign a contract that has it in. you will pay interest on this fee if you are financing.

Documentary Fee---the dealership cannot charge you this fee. It is not a mandatory fee to pay to the dealership. Not only that, if you finance a vehicle, you will be paying some interest on that small fee as well.


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The dealer is loaned money to buy the inventory from suppliers and holds the inventory in trust for the bank. As the borrower sells inventory to consumers, he pays the bank. The dealer keeps the mark-up of the retail price

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The invoice price is the price the dealer pays the maker of the car. It's also the price the dealer will pay a percentage of interest on while the car is in their inventory. The invoice price the the most ideal price you can achieve while negotiating. As the dealer doesn't make anything on the sale. You should always talk up from the invoice instead of talking down from the retail/sticker price.

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It's the bottom dollar a dealer pays. It goes like this: Wholesale then trade in then Private party then dealer price. You as a normal person probably will never pay wholesale for a car. Normal a dealer will "wholesale a car to anothr dealer just to move inventory and not loose any cash.

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An agent who buys and sells securities to and from his inventory is called a broker-dealer, although in this specific situation it should be called only a dealer. It is called broker-dealer because all the dealers, entities that keep their own inventory, also frequently act as middlemen between the seller and the buyer. When they act only as brokers, they make money on commissions and not price movements of the securities. As dealers, they mostly make money on price differences.

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It is not a should question, the dealer passes along the dealer inventory tax to the consumer, and you can negotiate it, but it rarely gets taken off or goes down. It is common practice, and not very ethical. Consumers paying the dealers taxes? Whats next? Paying a portion of their property taxes too? Dealers, roll it into the price of the vehicle, so that it can be negotiated, or possibly negotiated. That way the consumer doesn't feel like they are paying your bills.

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