What are car dealer fees? Car dealer fees are extra charges that a dealership adds to the final bill when purchasing a car. The most common additional fees are sales tax, vehicle registration, and a documentation fee.
Car dealership fees can often come as a surprise to car buyers because most car dealers will not bring them up during the negotiation stage when pricing a vehicle but rather towards the end of the process. There are many expenses to consider when buying a vehicle, and some states are better for purchasing vehicles in based on these expenses.
Every dealership has a dealer documentation fee, which covers the office personnel doing the paperwork to sell a new or used car. These fees range from state-to-state and typically range from $50-$607. Depending on the state, fees might be determined by a percentage of the sale price. Florida has the highest dealer fee of $607, followed by Colorado with $508 and Georgia with $502.
Many dealerships will not notify you of this fee until you are signing the final paperwork for your car; however, some dealerships will negotiate the fee with you, and some will even remove it.
Car buyers should be aware that 35 states do not limit dealer documentation fees; therefore, car dealerships can price this fee as high as they want. Alaska has no limit on the dealership documentation fee, but the fee must be included in the price of the car. Currently, California has the lowest average dealership documentation fee of $55.