What Is a Dealer Fee?

Dealer fees are additional charges added on top of a vehicle's advertised price, covering the dealership's own costs of processing the sale. Some are standard and hard to avoid; others are worth questioning or negotiating.

Common dealer fees

• Documentation ("doc") fee: covers paperwork processing — amount and whether it's negotiable varies significantly by state and dealer
• Dealer preparation fee: covers cleaning and preparing the vehicle for sale
• Advertising fee: sometimes passed through from a manufacturer's regional advertising costs
• Destination or transport fee: more common on new vehicles, covering the cost of moving the car to the dealership

Fees that are worth questioning

Some fees are effectively just extra profit with a formal-sounding name attached. It's reasonable to ask a dealer to itemize every fee and explain what each one specifically covers — and to negotiate or ask to have a vague or unusually high fee removed or reduced.

Fees that are typically required and non-negotiable

• Sales tax, set by your state and local jurisdiction
• Title and registration fees, set by your state
• Any legally mandated fees specific to your state

Always ask for the out-the-door price

Rather than negotiating the vehicle price and fees separately, ask for a single total out-the-door number that includes every fee and tax. This makes it much easier to compare offers between dealers and to spot an unusually high total.