What Are Doc Fees and Who Doesn’t Charge Them?

A Study in Alabama Chevrolet Dealership Doc Fees – How They Happen to Match $485 State Average

You may be an infrequent shopper of vehicles, and many dealerships count on that. One of the greatest deceptive advertising practices not regulated by the state of Alabama, and not regulated by many states in the USA, is the separately charged dealer “doc fee”. It is known by other names such as administrative fee, administrative charge, documentation fee, and others. Take note that if the advertised price is $40,740 and the doc fee is $499, your REAL price before taxes is $41,239. If another dealer advertises $41,000 with no doc fee, that price is better than the first dealer even if the first dealer’s advertised price looks lower online.

We did a study of 47 Chevrolet dealerships within our zone, and we researched dealer websites and Chevrolet.com inventory listings for a record from the dealership of a doc fee. When we found it, we captured it. We also noted all dealerships whose stated pricing online explicitly says it does not include doc fees but doesn’t share the fee, and we put those dealerships into the “Charged but not disclosed” category. We found a couple of dealerships that did not state doc fees were charged separately, did not state what the doc fee is, and did not state they did not charge a doc fee. We put them into the unknown category.

How did the results turn out?

Zero Doc Fee Club (3)

Three dealerships openly stated they charged no doc fee – Donohoo Chevrolet, Lynn Layton Chevrolet and Mitch Smith Chevrolet. Let’s give ourselves, but also these other two brave dealerships a round of applause. While other dealers undercut them on an advertised price, then pound the customer with a doc fee that could eclipse the savings online between the two prices, making the customer worse off, Donohoo, Lynn Layton and Mitch Smith take the impact to their businesses of competitors’ hiding of doc fees and advertising a misleadingly lower price. Whether for branding or for a principled stand, bravo to those that try to fight fairly.

And you thought dealers hated each other and couldn’t wait to bad mouth other dealers? Don’t mind mentioning a couple of dealers attempting to be transparent with pricing, at least with doc fees. Can’t speak to other aspects of pricing because we don’t know specifically about how they operate.

Disclosed online (26)

These 26 dealers at least have a record of the documentation fee on Chevrolet.com inventory listings or in the fine print below the advertised new vehicle. We did not find any of them stating the advertised price includes the fee. So, the advertised price must need the fee added to it to get to the real apples-to-apples price with zero doc fee dealers.

There was a grand champion at $898. Two dealers have doc fees of $799. Four dealers were between $649 and $689. Six dealers were between $589 and $599. Six dealers were between $483 and $499. Three dealers were $399, one was $339, one was $299, and two were $199. The average of them all was $538.15 per dealer.

We must say that dealers with sub-$300 doc fees at least are well below the average. It is a tough position to be a dealer with no doc fee while losing business because dealers with doc fees are undercutting your price. In our history, we had a $199 doc fee just to minimize the damage of competing with high doc fee dealers. But it just didn’t sit right with us, even if it is legal in Alabama, so we took the plunge into zero doc fees last year.

Charged but Not Disclosed (16)

If you are sufficiently outraged at the $538 per dealer of the ones that disclosed the fees, what are the fees on the dealers that do NOT disclose the doc fee on websites or Chevrolet.com listings? There are 16 of them for which we could not find the doc fee. Ask yourselves why the doc fee amount is not disclosed. We suspect it is not $200 instead of $600, but suffice it to say, you’d better ask if you don’t know it.

Unknown – Crickets (2)

There wasn’t a declaration that a doc fee is separately charged, and there was no doc fee on the website. Crickets on two dealers. If we were bettors, we’d bet those dealers have a doc fee.

WHAT ABOUT OTHER STATES

GEORGIA

Georgia has a law that requires the doc fee to be part of the advertised price.

https://consumered.georgia.gov/ask-ed/2018-10-30/dealer-fee-not-included-advertised-price-car

You might think that makes shopping in Georgia better, right? Well, we found dealerships with language that stated the dealer fee is charged separately and not included in the advertised price. Oops. Hope the Georgia regulators aren’t watching.

But we also found a theme where dealers state the advertised price is only valid if you reference it or bring a printout of it. We suspect that language is there so some dealers can add the doc fee onto the price they quote (which may match the advertised price), and if you complain about it, they tell you it must be referenced before the paperwork is done. We suspect the dealer would then adjust pricing to reduce the quoted price by the doc fee. But, if you do not bring it up, that dealer could argue using the website price and adding a doc fee on top is perfectly valid because the customer did not explicitly reference the advertised price of the website.

CAR EDGE DOC FEE STUDY

Car Edge has a page where it rounds up average doc fees per state.

https://caredge.com/guides/car-dealer-doc-fee-by-state

This is also available from world population review better sorted.

https://worldpopulationreview.com/state-rankings/car-dealer-fees-by-state

Who are the kings of high doc fees?

1. Florida at $995. Legendary in the dealer community for its sky-high doc fees.
2. North Carolina at $599
3. Virginia at $599
4. Georgia at $545
5. 4 way tie at $500 with our neighbors in Tennessee included along with Wyoming, Maryland, Missouri

Alabama is at $485, and if you include our 3 dealers with zero doc fees with the 26 averaging $538, our 29 Chevrolet dealers with stated doc fees average $483, right in line with all the dealerships in Alabama.

Who are the paupers of doc fees?

1. Minnesota has an average doc fee of $75, but has a max doc fee of $200, and it is climbing to a max of $275 in July 2023 and $350 in July 2024
2. California has a max doc fee of $85
3. Arkansas has an average doc fee of $110, and a max doc fee of $129
4. South Dakota has an average doc fee of $115
5. Oregon has a max doc fee of $115, $150 with an integrator

DO YOU HAVE TO PAY THE DOC FEE?

No dealer will remove the doc fee, though some dealers adjust the sales price lower by the amount of the doc fee to make your total price match the advertised price. If the dealer were to adjust the doc fee for some people and not others, the dealer would be exposed to legal ramifications from discriminatory pricing under the Truth in Lending Act. See this article from an industry lawyer. https://www.fi-magazine.com/309892/documenting-doc-fees

This means the doc fee stays on your deal as a doc fee regardless of the price adjustments. And if a dealer wants to separate a doc fee, there isn’t a problem with it on its face – so long as the sales price and doc fee together add up to the total price advertised. Some dealers have a doc fee to reduce salesperson compensation to be based on a percentage of profit after a doc fee for the dealership to cover expenses.

Blah, Blah Blah. If dealers could not advertise a lower price, pull customers in, then spring the doc fee on them, hoping it would not get noticed, then dealers would have no point in having a doc fee. Truthfully, it exists, so the advertised price can be lower. And the fact that some dealers charge almost $1000 means competing dealers charge doc fees to compete with the high doc fee dealers. It spreads like an ugly weed through the industry.

CAN WE GET DEALERS TO STOP CHARGING HIGH DOC FEES?

Apparently, most states aren’t interested in legislating this, and the FTC has spoken about improving dealership transparency (see this article we wrote about most recent FTC initiatives) but probably can’t control doc fee charging as well as the state.

Dealers will remove or adjust doc fees when they get shamed publicly and have lots of complaints and poor reviews from doing this. People only get educated by reading about doc fees. Feel free to share this with your friends and family so they can understand how doc fees impact shopping for vehicles.

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