Home Car Shopping What Is a Doc Fee When Buying a Car?

What Is a Doc Fee When Buying a Car?

Doc Fee Quick Facts When Buying a Vehicle 

  • A doc fee is typically charged to car buyers by car dealerships to process a vehicle’s paperwork.
  • Many states in the U.S. don’t regulate the amount of money a dealer can charge for a doc fee, though some states do. 
  • Doc fees are taxable, and dealers consider them profit centers. As a result, it’s negotiable. 

If you began the process of buying a car, you probably came across “doc fees,” or documentation fees. Dealers sometimes charge this fee in addition to a car’s purchase price, and it can often add several hundred dollars on top of what you and the dealer agreed on for the final sales figure. So, what exactly is a doc fee? Must you pay this? We have the answers. 

What Is a Doc Fee? 

A doc fee is typically charged to car buyers by car dealerships to process a vehicle’s paperwork. Essentially, a doc fee covers all the dealership’s back-office employees who handle the money to those who deal with the title, registration, license plates, and the DMV or revenue department. 

The only problem: Shouldn’t the purchase price cover those costs? After all, if a dealership makes a profit on each car sold, shouldn’t some of that profit go to paying each employee? To many consumers, an extra charge like this seems fraudulent and unreasonable. 

But is it fraudulent? In most cases, the answer is no. Many U.S. states don’t regulate the amount of money a dealer can charge for a doc fee, though some states do. If you’re in a state that doesn’t regulate the fees, prepare for the dealer to hit you with a bill of several hundred dollars, even after you’ve negotiated the purchase price to a mutually agreed point. 

Do You Have to Pay It? 

Doc fees are taxable, and dealers consider them profit centers. 

So, do you have to pay the doc fee? The answer is yes and no. Some shoppers get so hung up on the doc fee that they forget about the most important part of a car-buying transaction: the bottom line. The bottom-line number includes the purchase price, tax, and every single fee you can imagine. That’s the number you focus on to negotiate. 

Here’s what we mean: If you’re prepared to pay a certain amount of money with tax for a car, ask the dealer to deal in the bottom line or out-the-door price or a price that includes the doc fee if the dealer charges one. That way, you’re not haggling over the exact dollar amount of fees and taxes, which can be disheartening. Instead, you’re focused on the price you pay overall, and if the dealer wants to include a doc fee in that price, then so be it. 

For instance, say you’re shopping with a $30,000 budget and looking at a $28,000 car with a $500 doc fee. Add in a 7% sales tax, and this car costs $30,495. In this case, you might tell the dealer you would be willing to pay $30,000 out the door. After that, it won’t matter whether the dealer charges the doc fee or not since you’re only dealing with the total price. 

How Much Is a Doc Fee? 

Dealers may charge between $50 and $1,500 for doc fees, which are taxable. Don’t forget that vehicle registration in one state may cost less than in another, and some states cap the doc fees dealers can charge. Don’t forget that vehicle registration costs vary. For example, vehicle registration for a 2024 Hyundai Tucson gas vehicle in Orange County, California, costs $499. As a result, car buyers can expect to pay at least that much there. Consequently, before you head to a dealership, it’s best to check your state’s fees for those line items to determine the wiggle room on your invoice for doc fees since dealers often use these as profit centers. 

PRO TIP: Autotrader editor Renee Valdes recently shopped for a 2024 vehicle, and during visits to several dealerships, she saw charges of up to $699 for doc fees. It’s wise to question all fees and ask for a breakdown. 

Be Aware of Other Fees 

When negotiating the car price, we strongly suggest you check all the fees before you sign any papers. Be sure to explicitly ask the salesperson if the price includes all fees so they can come clean about any extra charges you might see on the final paperwork. If a new fee crops up after this, be prepared to walk away and find a different car at a more honest dealership. 

Related Car Buying and Leasing Fee Articles: 

Editor’s Note: This article has been updated for accuracy since it was originally published. 

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42 COMMENTS

  1. this was a good read, and thanks for the heads up. so in utah im seeing doc fees and paperwork processing fess resulting in 1000k. where ive been told by some dealers doc fee is fees for the truck to be on the lot.

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