When you’re buying a car, dealer handling fees are those extra costs that come with the purchase. It’s good to have a clear picture of these fees before you finalize the deal. Let’s break down what you should expect, what you can negotiate, and what you might want to avoid.
Fixed Fees: What You Can’t Avoid
Unfortunately, there are fees that are unavoidable when purchasing a car. These are known as “fixed fees” and simply add to the cost of your vehicle. Keep these fees in mind when determining your final cost.
Paperwork Fees
Expect charges like conveyance and documentation fees to cover the dealer’s cost of handling paperwork. These might range from $75 to over $500, but they’re standard practice.
State-Related Charges
Dealers will handle your state sales tax, title, and registration documentation (a.k.a. tax, title, and license). It saves you the hassle of a trip to the DMV but comes at a cost.
Pre-Delivery Services
The dealer often takes care of state vehicle inspection and emissions testing. They’ll charge you, but it saves you another errand.
Carmaker’s Destination Charge
You’ll have to foot the bill for the car’s delivery from the factory to the dealership. Some have criticized recent increases in these fees, but they’re determined by the manufacturer, not the dealer.
Negotiable Charges: Things You Can Haggle Over
Fortunately, there are certain fees that are avoidable. If you notice any of these while reviewing your paperwork ahead of signing, ask to have them removed or reduced.
Market Adjustment Fees
Buying a hot new car? You might see this fee, added by the dealer to increase profit. Don’t hesitate to negotiate this one.
Advertising Costs
Dealers may add fees to cover their advertising costs. Feel free to discuss this with them.
Other Delivery and Handling Charges
If last-minute expenditures alter the expected price, negotiate! Your skills can help you get a fairer final price.
Optional Add-Ons: Watch Out for These
Other fees seem outlandish and usually they are. We compiled a list of them from the mundane to the silly.
Dealer Prep Charges
Some dealers might ask you to pay for car cleaning or plastic removal. You should know that new cars come clean from the factory, so these charges should already be included in the car’s price.
Unnecessary Extras
Be cautious of add-on services like fabric protection, paint protection, rustproofing, and VIN etching. These aren’t needed for a new car, and DIY solutions exist for things like VIN etching.
Financing-Related Extras
Think carefully about insurance add-ons such as Guaranteed Asset Protection (GAP) insurance. By securing financing from an external bank, you might be able to sidestep many of these costs. Even when GAP coverage seems like a smart choice, remember that you have options regarding where to acquire it.
Know Your Costs
Buying a car involves more than just the sticker price. Knowing what fees to expect, what you can negotiate, and what you may want to avoid can make your car buying experience smoother. Engage in the process, ask questions, and don’t hesitate to negotiate where possible to ensure you’re getting the best deal.
References
Linkov, J. (2022, August 6). How to Avoid Car-Buying Fees. Consumer Reports.
Jones, J. (2022, August 19). Dealer Fees to Watch Out For When Buying a Car. LendingTree.
See Also — How to Lease Your Next Vehicle
Adobe stock photo acquired under license.
