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Why does the price of a car come with added fees?

Some of them, like the documentation fee, can be a head scratcher

ATLANTA — If you’ve got the means to buy a vehicle for Christmas, you might wonder about the explanation behind some of those fees.

The cost of a car involves taxes, vehicle registration, and title fees that won’t surprise you.

Then, there are times when you wonder what you’re getting for your money.

“These aren’t fees that have to be charged to the customer,” said Ryan Keeton of Carvana.

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For customers, the biggest mystery may be the “dealer fee,” sometimes known as a “documentation fee.” It’s how some dealerships charge customers for preparing and filing paperwork related to the sale of a vehicle.

“It can be anywhere from 500 to 1000 dollars,” said Keeton. "What’s hard is that it appears really late in the process. It’s really kind of hard to walk away or say no at that point.”

Some states limit the “dealer” or “documentation” fee, but most do not.

You might see something called a destination fee. The National Association of Automobile Dealers says manufacturers will charge to ship a vehicle from the factory to the dealership.

You could also see an advertising fee. That’s your contribution to help pay for the dealership’s commercials.

According to Georgia’s Department of Consumer Affairs, fees like these have to be in the advertised price. Keeton says it’s worth your time to reach out to a dealership before you visit to ask what fees they charge.

“And say, 'hey, this doc fee doesn’t feel right, I don’t necessarily want to pay it.' You absolutely should push back and question that," he said.

He’s not alone in suggesting it should be part of the haggling that goes with buying a car.



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