Subaru cars sit in the Capitol Auto Group dealership on Wednesday, April 23, 2025, in Salem, Ore.
Sacramento, California – In a move that has sparked backlash from consumer advocates and raised eyebrows among voters, the California Senate on Tuesday passed legislation allowing car dealers to charge buyers up to $500 in processing fees per vehicle — a significant increase from the current $85 cap. The bill passed with overwhelming bipartisan support, despite ongoing public commitments from lawmakers in both parties to ease the financial burdens facing Californians.
Senate Bill 791 would let auto dealers charge up to 1% of a vehicle’s purchase price, capped at $500, for document preparation and processing — a change industry lobbyists say is long overdue. But critics view it as a glaring example of Sacramento’s tendency to profess concern about affordability while quietly greenlighting policies that raise costs for consumers.
“This is the opposite of saving money for people,” said Rosemary Shahan, president of Consumers for Auto Reliability and Safety. “There’s no two ways about it. It’s just benefiting car dealers at the expense of car buyers.”
The legislation’s lone “no” vote came from Sen. Henry Stern, a Democrat from Calabasas, who cited car dealerships’ lobbying against environmental mandates and consumer protections. “Bad behavior shouldn’t be rewarded,” he said.
Supporters of the bill argue the current fee cap is outdated and no longer covers the administrative burden dealers face when processing loans, DMV paperwork, and anti-fraud documents. Anthony Samson, a lobbyist for the California New Car Dealers Association, testified in April that without the ability to recoup rising compliance costs, dealers would be forced to seek relief from the legislature — as they’ve done now.
But the optics are hard to ignore. The dealers association has donated at least $2.9 million to lawmakers since 2015, according to data compiled by Digital Democracy. Among the bill’s most visible backers is Sen. Dave Cortese (D-San Jose), who authored the legislation and has received $7,000 in contributions from the group. Cortese acknowledged that the fee increase was “not ideal,” but argued it reflects the cost of doing business in California.
Seven Republicans voted in favor, including Senate GOP leader Brian Jones, who has criticized Democrats for making California unaffordable but declined to comment on his support for the bill. Jones has received nearly $29,000 from the dealers association since 2015.
While lawmakers emphasized their commitment to affordability, critics noted the disconnect between rhetoric and policy. “If we’re trying to help everyday Californians,” said Sen. Carolyn Menjivar in April, “why are we helping an industry already making a healthy profit?” Menjivar abstained from voting Tuesday — a common practice in the Capitol that allows lawmakers to dodge both political fallout and donor displeasure.
The bill now moves to the Assembly, where lawmakers are expected to consider amendments — and the political cost of another broken affordability promise.
