Fees associated with the DMV from registration and plates to taxes are already line items most car buyers overlook until it comes time to sign the final paperwork. That’s when they see numbers that don’t just include the negotiated price of the vehicle, often for the first time.

The last thing either a customer or a dealer wants is to somehow get those fees wrong and learn about it well after the car has left the lot.

What Are Vehicle Registration Fees?

DMV vehicle registration fees are collected by the dealership to cover the cost of registering a vehicle with the state’s Department of Motor Vehicles. These fees typically include title transfer, license plate issuance, and other state-mandated registration costs.

Depending on the state, calculating these title and registration fees can be quite complex. And if a dealer is calculating these fees in a DMS without a system like CVR, they’ll need to rekey the data into the separate system of the DMV or rely on the fees generated by the DMS — both of which are estimates. This can lead to errors and accuracy issues.

Sometimes this means eight different data points or 10 different fees that must manually be reentered into the DMS. In some instances (and some states), companies like CVR make it much easier, literally. Type the two letters “EZ” into your CVR-integrated DMS and all the fees are calculated automatically and pushed back into the deal. That’s why the tool is called EasyFEE. EasyFEE and other DMS-integrated fee calculators aren’t available in every state but do serve as an example of what’s possible. And CDK DMS users can stay in the CDK system throughout the entire process because the DMV fee process is embedded.

Why Error-Free DMV Fee Calculation Is Critical

The very worst outcome of a mistake in this process would be the need to correct fees with the customer after they’ve already signed on the dotted line and driven the car home. Then they get a call from the dealership explaining they actually owe more because of an error on your part.

This leads, not surprisingly, to lower customer satisfaction scores and damages the likelihood of repeat business and referrals. A dealer can decide to absorb the costs to avoid the impact on the customer but that leads to a clear financial hit to the store.

An error in the customer’s favor will likely not lead to the same negative reputational impact but still doesn’t impart confidence in your Finance team. Costs also compound from simply cutting the check and mailing it. Plus, the dealership is responsible for tracking the refunded amount if it isn’t cashed for up to three years.

And that’s just the impact on the customer. There’s also the possibility of leaving money on the table. If the fee calculations lead to a higher price to the customer, they’ll be less likely to spend on other F&I products. All of it impacts the final monthly payment and erroneously higher fees will send that payment higher than it should be, impacting the customer’s mindset when it comes to budgeting their purchase.

The advantages of using CVR/AVRS to calculate and execute fees is clear. As a leader in the space for over 30 years, CVR/AVRS handles over 15 million transactions and DMV inquiries annually. Find out if CVR/AVRS is available in your state and learn more about its benefits.