What’s a doc fee, anyway? Doc fees cover the cost a dealership incurs to process a vehicle purchase. In other words, they pay for all the paperwork (and personnel) involved with selling you that shiny new ride. Doc fees originated when dealerships separated their Finance and Insurance departments, commonly dubbed F&I, from the rest of the dealership around the 1960s.
Doc fees can have a lot of names: conveyance fees, processing fees or service and handling fees. They can make a real difference in the final price, too, and where you buy your car can have a big impact. For example: a dealership in greater New York charge a $75 doc fee while a New Jersey dealer wanted $349.
That’s because New York state has a $75 maximum for doc fees, according to the Greater New York Automobile Dealers Association. New Jersey, like 34 other states and the District of Columbia, has no such cap.
Which states cap doc fees?
- Alabama has no cap on doc fees, according to the Alabama Department of Revenue.
- Alaska has no cap on doc fees, according to the Alaska Auto Dealers Association.
- Arizona has no cap on doc fees, according to the Arizona Automobile Dealers Association.
- Arkansas calls them “service and handling” fees and caps them at $129, according to the Arkansas Automobile Dealers Association. Dealers cannot charge a separate doc fee.
- California calls them “document processing” fees because of the association between doc fees and government charges, the state’s DMV told us. California caps the fee at $65 if the dealer hasn’t partnered with the state to provide on-site registration services to the buyer. If the dealer has such a partnership, it may charge up to $80.
- Colorado has no cap on doc fees, according to the Colorado Automobile Dealers Association.
- Connecticut has no cap on doc fees, according to the Connecticut Automotive Retailers Association.
- Delaware restricts what’s called the “doc fee” to 3.75 percent of the vehicle’s value, but it goes to the state in lieu of sales tax, according to the Delaware Automobile and Truck Dealers’ Association. Dealers can charge processing or administrative fees (what other states would call a traditional doc fee) and there is no cap on that.
Visit Cars.com for a complete listing of state doc fees.
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