A documentation fee, or doc fee, covers the administrative cost of preparing the sales contract, title work, and registration paperwork. Doc fees vary by state and dealer, and many states cap the allowable amount. They are applied uniformly to all sales.
Doc fees contribute to per-deal revenue and should be disclosed clearly and early in the sales process. In states with caps, dealers must ensure their fee stays within the legal limit. Including the doc fee in the initial price presentation avoids friction late in the negotiation.