What is the dealer document fee and should you pay it?

This is part of our Car Buyer's Glossary series breaking down all the terms you need to know if you're buying a new or used car from a dealership.

Timing is everything so, when it comes to car buying, dealership document fees are like the late party-guest who suddenly arrives while you're saying final goodbyes and putting leftovers in the fridge. To put it mildly, they're an annoying but common part of most car transactions. For car buyers who don't expect them, however, they can seem like a blatant rip-off.

What, exactly, is a document fee?

First off, let's get the wording down, because a document fee can go by many different names. Sometimes they're called a processing or paperwork fees, or they might simply be referred to as "doc fees." No matter the label, they all mean the same thing.

This fee covers the back-office work a dealership does with any car purchase. Basically, you're paying for paperwork. This can include vehicle registration, license plates, checking a trade-in value, making certain a trade-in is free from recalls, and other administrative functions that come with buying or leasing a car.