Sometimes when you purchase a new car or a used car from a dealership, you’ll see a “dealer documentary fee” listed below the manufacturer’s suggested retail price (or MSRP) on the final invoice. This is a charge that many dealers levy to cover the administrative work related to the transaction. It includes everything from filing vehicle registration paperwork with the Department of Motor Vehicles (or your state’s DMV equivalent) to transferring a title to double-checking all the financial information on the buyer’s lien application.
The dealer doc fee is common to the car-buying experience and regularly included in a vehicle’s out-the-door price, but it’s not a government mandate; it’s wholly up to the car dealer whether to apply it. Some states (such as California and New York) limit how much dealers can charge for this, while others (like Arizona, Florida, and Texas) allow car dealerships to set the rate as high as they want. This could leave you paying hundreds for paperwork processing on top of the price of the car. That’s why, with any car deal, it’s important to ask about this upfront.
What Is a Dealer Doc Fee?
- Are Doc Fees Negotiable?
- How Much Is a Typical Doc Fee?
- Do You Pay Sales Tax on a Doc Fee?
- Why Do Dealers Charge a Doc Fee?
- What Fees Should You Not Pay at a Dealership?
Are Doc Fees Negotiable?
Since the dealer sets this processing fee, they can reduce or waive it at their discretion. That doesn’t mean they will, however. It could be a dealership policy to charge every car buyer the documentation fee, but if that’s the case, you can always try to negotiate on other items. Perhaps the dealership will be willing to reduce the car’s sales price or provide accessories or an extended warranty free of charge to offset the cost. But when demand for vehicles is high — as is currently the case in February 2025 — dealerships have little incentive to negotiate at all.
How Much Is a Typical Doc Fee?
Dealer doc fees vary widely, from less than $100 to close to $1,000. Before settling on the price of the vehicle it’s best to check your state’s laws, as each place has its own regulations.
Arkansas, California, Delaware, Illinois, Louisiana, Maryland, Michigan, Minnesota, parts of Mississippi, Missouri, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Washington, and West Virginia cap dealer documentation fees. Some set a flat limit while others base it on the car’s value or how the paperwork is submitted.
New Hampshire limits the cost dealers can charge for processing state-filed paperwork to $27, but dealers can levy additional fees related to administrative work.
All other states and the District of Columbia allow dealers to set their own processing fee for a vehicle purchase. To give you an idea of the range, here’s a sampling of the average doc fees that dealers charge across the U.S.:
- Arkansas: capped at $129
- California: capped at $85
- Maryland: capped at $500
- Michigan: capped at 5% of the cash price of the motor vehicle or $260, whichever is less
- Pennsylvania: capped at $374 for processing title work manually and $449 for processing title work online
For states without caps, doc fees are all over the place and particularly high in the southeast region:
- Arizona: typically $499
- Colorado: typically $699
- Florida: typically $999
- Georgia: typically $599
- North Carolina: typically $699
- South Dakota: typically $200
- Tennessee: typically $499
- Texas: typically $150
- Virginia: typically $799
That said, dealers in the same area often charge similar fees. If you want to get a sense of what to expect, call around and ask about the store’s paperwork processing cost before heading out.
Do You Pay Sales Tax on a Doc Fee?
In most states, the DMV or equivalent agency considers the dealer doc fee as part of the vehicle’s selling price, which makes it subject to sales tax. However, some states (like Iowa and Ohio) do not tax it. There are also some places in the U.S. (Alaska, Delaware, Montana, New Hampshire, and Oregon) that don’t have statewide sales tax.
Why Do Dealers Charge a Doc Fee?
A car purchase is pretty complicated, involving a lot of paperwork. Filing liens, processing titles, registering vehicles, printing out temporary license plates, dealing with any trade-in vehicle and submitting documents to one entity or another takes time and careful revision. Car dealerships employ people to do these tasks, which costs money. They then may choose to pass along at least some of that expense to their customers.
What Fees Should You Not Pay at a Dealership?
While you may not be able to negotiate on the dealer doc fee, there are others that should make you raise your brow. Try to negotiate the following:
Delivery and preparation feesThe invoice will have a destination charge, which is the cost to ship the vehicle from the factory to the dealership, where it will receive a quality check. If you see an additional charge for inspecting the vehicle or prepping it for sale, contest it.
Market-adjustment feesAlso known as an additional dealer markup, this is something dealers add to new vehicles in high demand because they know people will be willing to pay it to get the car. It may be negotiable, but it’s entirely up to the dealer.
VIN etchingThis theft-deterrent service involves etching the car’s vehicle identification number (VIN) into the glass to make the car so thieves will have a harder time fencing it. Dealerships often overcharge for it, so shop around if you want this done to your car.
Fabric protection, paint sealing, and rustproofingThese are just coatings that you can apply yourself. Consider skipping them.
Extended warrantiesIf you’re concerned about the reliability of the vehicle, it’s probably not worth buying. Extended warranties can add a considerable amount to the bottom line, and they tend to cover only certain things, so make sure to read the fine print.
