When buying a car, you’re likely to stumble upon that one last fee. It’s known by many names: processing fee, documentation fee, administration fee, electronic filing fee, etc.
Dealer Documentation fees cover dealer administrative costs involved with processing the title, registration, or any other paperwork, filing, or various clerical tasks. However, these fees are largely unregulated and can range as high as $998. Over $900 to file paperwork? We think not.
There are eight states that have a cap on these fees and only seven more that regulate what dealerships can call them. The other 35 state have few or no regulations, whatsoever. The southeast region of the United States tend to have the highest documentation fee, with Georgia topping the list with an average fee of $519. Over $500 to file paperwork? We think not.
This fee is almost impossible to avoid. While it is not illegal to negotiate these fees, waiving or lowering it for one customer, could open a class-action lawsuit for discrimination. Also, depending on the regulations of each state, the dealership may have to then refund the difference to all customers they ever sold a car to. Thus, be prepared to pay the fee.
What you can do, however, is negotiate with the dealership to reduce the cost of your car by the amount of the processing fee.