What Is a License Fee at an Auto Dealer?

A dealer's licence fee also is known as the plate or registration fee. The dealer handles your Department of Motor Vehicle (DMV) paperwork and collects the state-mandated fees to register your vehicle. The dealer is authorized by the DMV to handle the registration for the car you purchased.

Types

You can transfer your plates or get new plates from the dealership. Depending on your state, you might pay a different amount for either transaction. Your registration is sent to you later in the mail, while proof of purchase is given to you immediately so that you can drive your newly purchased vehicle.

Considerations

Although the dealer can transfer your plates based on your current registration's expiration date, you will have to update your registration accordingly. If you transfer plates, pay attention to the expiration date of your current registration so that you can renew when you are supposed to. The dealer can issue you new plates that are good until the date your state allows per registration period (some are annually, others are four years) if you are nearing your expiration.

Misconceptions

The registration fee is not used for dealer profit. The amount you pay is what DMV requires you to pay. The dealer simply handles the service for you and pays the required fee on your behalf. The document fee is dealer profit. This is the amount a dealer charges you to handle all DMV and finance transactions.