Key Takeaways
Let's say you are about to sign the final paperwork for your new car, and you probably didn't understand a thing on the paper. It's all Greek to you. But one last look could help you save money. Some dealer fees must be paid, but many don't have to be. If you get rid of the extras you don't want, you could save hundreds or even thousands of dollars.
You can expect to pay fees equal to 8% to 10% of the price of the car. There are fees you have to pay, like those to your local or state government, and extras may or may not make sense for you.
When you buy a car, it needs to be registered with the government in your area. A lot of the work is done for you by the dealership, and each state has its own rules. Tax, title, and license (TT&L) are the basic fees, but depending on where you live, you may have to pay more. California has a calculator that lets you figure out how much it will cost to register a car there.
When you plan to buy a new car, you will likely have to pay a destination or freight charge to cover the cost of getting it from the factory to the dealer. Since it is a federally regulated fee, you'll pay the same price (by make and model). Whether you buy it 1,000 miles away or pick it up at the factory, it will be the same.
Before a car can be sold in many states, it has to pass a safety and emissions test. Then, dealerships charge you for that cost. Most of the time, they are small, ranging from $7 to about $40.
The "doc fee" covers the cost of getting all the paperwork ready and filing it. Some states, like California, cap the doc fee at a certain amount. In other states, however, there is no cap. The average doctor's fee in Florida is $895.
Car prices have never been higher. Dealers charge "market adjustments," which are extra fees on top of the manufacturer's suggested retail price (MSRP) that are not regulated and can be changed at any time.
This warranty pays to patch, fix, or replace your tires or wheels if they get damaged on the road by things like nails, broken glass, a pothole, or tree limbs. Tires are expensive, so most people don't buy them very often. If your biggest repair over a few years is minor, the policy may not be worth the cost.
Upon expiration of the manufacturer's warranty, a vehicle service contract or extended auto warranty takes effect. Most of the time, they aren't backed by the dealers who sell them. Make sure the company offering the extended warranty is reputable. So carefully read the paperwork to find out exactly what labor and parts are covered and for how long.
Let's assume you suddenly lost your job or got sick and couldn't make your car payments; loan protection insurance would pay off the rest of your loan balance, even if you died. You could look to your bank or credit union for something like GAP insurance. Don't feel like you have to buy it from the dealer.
The dealer may try to sell you expensive "appearance packages" like tinted windows, wheel locks, and paint sealant. Most of the time, you don't need these kinds of upgrades, and you can save money by having a local auto shop put them on for you.
Dealers may charge you to put your car's vehicle identification number (VIN) on the windows, but you can easily do this yourself. You might need help from your local police department or a car club like AAA. A VIN is like a fingerprint or Social Security number for your car. If you etch it on the windshield or other places, it makes it harder for thieves to sell your car or its parts.
GAP, or Guaranteed Asset Protection, pays the difference between the value of your car and the amount you still owe on it if it is totaled. If you make a down payment, you probably don't need GAP, but if you don't, it could be helpful. You don't have to get this kind of insurance from the dealer. GAP is offered by a lot of companies, which could include auto insurance companies. Look around before you decide to take an offer.
If a car is stolen, systems like OnStar and LoJack can track where it is. Some dealers offer these services as add-ons, while others add them to every car they sell. Before you go car shopping, think about whether they're worth the money.
Some fees depend on what you like and how willing you are to take risks. The negotiable fees might not be same for another. It is always better to keep a fun in hand. If you don't know much about a fee, you should find out more before you sign. Once you sign the papers and drive away, it could be said that the deal is sealed.
When you buy a car, it's important to know about the different fees and taxes that come with it. Think about the many tips for negotiating and saving money when buying a new or used car. One of the best ways to ensure you don't go over budget is to have a firm "out-the-door" price that includes taxes, fees, and other extra costs. Know your dealer fees before complying to pay for it.
Dealers charge document and TT&L fees for every car sale, depending on what the state lets them do or makes them do. Let it be a new or used car; you'll pay the same kinds of fees. Except for used cars, which don't have to pay a destination fee. The good news is that fees for used cars are often less than fees for new cars because used cars are usually cheaper.
When you buy a car, you may have to pay fees that add up to 8% to 10% of the price of the car. However, not all of these fees go to the dealer's pocket. They include any taxes, fees for registration, and other fees that the law requires.
It depends. Fees that your state or local government charges are required and can't be argued about. Dealers can charge fees, but they all have to be the same. They can't charge one customer one price and another customer a different price. You could ask the dealer to lower the car's price by the fee amount.
Depending on the state and the dealership, documentation fees can range from $85 to more than $895.
If you purchase a vehicle from a private seller, you will not be charged dealer fees. But you will still have to pay any inspection, tax, and registration fees your state requires.
Refer an industry guide to find out how much you should pay for a new car. Sites like Kelley Blue Book and Edmunds are free for consumers to use. Prices at dealers may be higher or lower than the guidebook value.