Documentation fee

Definition

A documentation fee is a charge by a dealership for processing the paperwork related to buying or leasing a car. It covers administrative costs such as filing, printing, and handling documents.

5 Must Know Facts For Your Next Test

1. Documentation fees vary by state and dealership.
2. These fees are usually non-negotiable but should be clearly listed in the purchase agreement.
3. They are separate from other costs like sales tax, registration fees, and the price of the vehicle itself.
4. Some states have legal caps on how much dealerships can charge for documentation fees.
5. Understanding all fees, including documentation fees, helps in accurately calculating the total cost of buying or leasing a car.

Review Questions

• What is a documentation fee?
• Are documentation fees negotiable or fixed?
• Why is it important to know about documentation fees when calculating the total cost of a car?

Related terms

Registration Fee: A fee charged by the state for registering your car and obtaining license plates.

Sales Tax: A tax imposed on the sale of goods and services, including vehicles.

MSRP: Manufacturer's Suggested Retail Price; the price recommended by the automaker for selling the vehicle.