Common Dealership Fees You Should Not Pay

By Lauren Fix, Car Coach Reports

When you’re ready to buy a new vehicle and get to the paperwork, you might be surprised to find some additional fees on the purchase contract. You agreed to pay a specific amount, but this is not the same amount on the paperwork. Some of these additional fees can add thousands of dollars to your bill. Some fees are part of the price and are unavoidable, while others you need to dispute and NOT pay.

Knowing which fees to expect and what fees to challenge will help save you a lot of money. Knowing the reason behind these fees will help you save money too.

Credit: Wilson Joseph

Fees You Have To Pay
There are legitimate fees and taxes you need to pay to purchase your vehicle.

Destination Charge
Your car has to make its way from the manufacturer to the dealership, and the dealership will ask you to cover the costs of getting it there. The automaker, not the dealership, sets the price per brand and model, and this is a fee you can’t avoid.

An easy way to know that this is a legitimate fee is by checking the vehicle’s window sticker or Monroney Sticker.

Doc or Documentation Fee
Doc fees are simply a profit center for the dealership. This covers the cost of the dealer handling the paperwork. Some states limit this amount, and some don’t, but it will generally cost you about $100-500.  Be sure to question any amount more than that.  

State Sales Tax
Unless you live in a state where there’s no sales tax, you need to pay it at the time of purchase. However, if you are buying a car in a state you don’t live in, you will pay your home state’s sales tax when you register the vehicle. Make sure you remind the dealer so that they charge you the right amount.

Title, License Plate, and Registration Fee
The dealership probably has a good relationship with your local DMV and will be able to get your title and registration, tags, and plates much more efficiently and quickly than you would be able to do on your own.  

Credit: Ervin Bolat

Fees You Should Never Pay
Don’t be fooled into spending more money than you need to. These are fees you should never pay.

Dealer Preparation Charge
This fee is similar to the delivery charge and might be listed on that unofficial window sticker. It should be included in the retail price and not added as an additional expense.

Fabric Protection
A little bit of Scotch Gard will go a long way towards protecting your seats and is a cheaper option than paying the dealership a lot more to spray it for you. If you are really concerned with protecting your seats, buy some seat covers.

Paint Protection
Paint protection is very popular these days, especially with more pricey cars. It is a transparent film or process like Opticoat that will protect your paint. It’s less expensive to go to a local detail shop and have it done. A new car’s paint should be protected by warranty if rust occurs.

Rustproofing and Undercoating
Rustproofing is old school. Unless you drive through salt piles, your vehicle’s undercarriage will do just fine in almost any inclement weather without paying for this expensive charge. The risk of rust is low, and the warranty covers it. Pass on this one.

Vehicle Identification Number Etching
The salesperson will try to sell this to you as additional security in case your vehicle is stolen. Collision shops can add an etching much cheaper to your ride if you are that concerned. Insurance covers stolen cars, so pass.

Advertising fee
Dealerships pay to advertise their business, and they will try and pass on some of that cost to you. Ideally, this cost should be told to you before you see it on the final paperwork, and often it will be listed on the vehicle’s sales tag. If the first time you hear about it is in the contract, definitely push to have it taken out.

Nitrogen Fees
The dealer will offer to fill your tires with pure nitrogen gas to get more life out of your tires. Nitrogen is used for race car tires, but it’s a waste for daily drivers, and you can always add it later if you want it. Pass and go with regular air. The dealer can charge as much as $200. Yikes!

For Used Cars – Reconditioning Fee
If you’re purchasing a used car, you need to be wary of this fee. When car dealers purchase used vehicles, they recondition them to get them “showroom ready.” Reconditioning includes mechanical inspections, detailing, and more. It is the cost of doing business for a car dealer.

If you’re looking at purchasing a used car and the dealer has added reconditioning fees to the purchase price, you should walk away. This is not a fee that you should pay—this cost incurred by the dealer and should not be part of the selling price.  

Credit: Gan Khoon Lay

The Bottom Line
If you’re not sure about a particular fee, ask. An honest salesperson will be able to clearly and convincingly explain why a charge is necessary. Can you negotiate this “fee?”

Absolutely! Sales managers do not expect every vehicle they accessorize to sell for full price. This tactic to boost dealer profit works on many people, but you don’t have to fall prey to it. If you aren’t interested in the accessories, negotiate them off of the vehicle’s selling price. It isn’t easy, but it is entirely within your rights.

Can you think of any other fees not to pay? Let us know by commenting below or starting the conversation on the NMA Facebook Page.

Lauren Fix, The Car Coach®, is a nationally recognized automotive expert, analyst, author, and television host.  A trusted car expert, Lauren provides an insider’s perspective on a wide range of automotive topics and aspects, energy, industry, consumer news, and safety issues.   

Lauren is the CEO of Automotive Aspects and the Editor-in-Chief of Car Coach Reports, a global automotive news outlet. She is an automotive contributor to national and local television news shows, including Fox News, Fox Business, CNN International, The Weather Channel, Inside Edition, Local Now News, Community Digital News, and more. Lauren also co-hosts a regular show on ABC.com with Paul Brian called “His Turn – Her Turn” and hosts regular radio segments on USA Radio – DayBreak. 

Lauren is honored to be inducted into the Women’s Transportation Hall of Fame and a Board Member of the Buffalo Motorcar Museum, and Juror / President for the North American Car, Utility & Truck of the Year Awards.  

Check her out on Twitter and Instagram @LaurenFix.

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