What is a Doc Fee?

Explaining Doc Fees in Detail

Doc Fee?  When it comes to buying a new or a used car, the price tag that you see kept on the top of it is not the only amount you have to pay to own it. A host of other charges applies as soon as you agree to own that piece of automobile such as licensee fee, title fee, sales tax, and various others. Dealers often add many other kinds of charges and this increases the selling price to several hundred dollars extra to what was initially agreed on. Hence, the final out-of-the-door prices that you are going to pay can be anything. These additional charges are often referred to as “doc fee” or “documentation fees” and it is highly suggested to determine them prior to making the full payment.

What is a Doc Fee?

Although the introductory paragraph might have given you a glimpse of doc fee, here is a complete explanation of what it actually is and what are its capacities.

A doc fee, also known as documentation fee, conveyance fee, or document fee – is the additional fee charged by car dealers for processing the vehicle’s paperwork. The fee covers the cost of all the big and small documents that get evaluated in the process such as the DMV, registration, preparation fees, VIN etching, etc.

Is it legal? How can you know it is not fraudulent?

In most of the cases, the doc fee is not regulated by the dealer, but by the government. The dealers make a profit from the car that they sell to you at its selling price. Whatever money you are paying additional for the paperwork of the vehicle goes to the several departments of the government. However, if you are in a place where the state government does not regulate the fees, the dealer can hit any price on you.

Is it negotiable?

Generally, the doc fee is not negotiable. Only the selling price of the new or used car that you are going to purchase is negotiable. The doc fees are generally capped by Government and dealers are not allowed to make any changes to it. For those areas where dealers are regulating the fees, they might be negotiable.

Is it necessary to pay them?

The answer is a definite ‘yes’. The documents include the legal certificates and registration copies of the car that makes you eligible to own or drive it. You must ensure that all kinds of taxes, fees, and prices are paid before you take it out on the road. Because, if you get caught driving the vehicle with no or incomplete documents, you might have to pay a hefty fine.

Therefore, while purchasing the car, always ask the dealer for its overall price. This will include the selling price of the car, doc fees, sales tax, and other charges. Make sure with the dealer that no new fee crops up later that will modify the price. In case it does, you always have the option of shifting to some other honest dealer.

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No information contained herein can be relied upon as legal, tax or any other type of professional advice. It is for general informational purposes only and does not apply to your particular set of circumstances.
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