Avoiding Unnecessary Car Dealer Fees
After you’ve negotiated the sales price of your new car, you might be surprised with a total due that is much higher than expected. While some of these charges are a legal requirement, others are strictly up to the dealer. When you understand the nature of these fees, you can often save money by getting the dealer to reduce or remove them.
Here are five such fees to watch for:
1. Preparation fees
These are fees that the dealer charges for preparing the vehicle for
sale. They include things like removing protective coverings on the
seats or doors and washing the car. You wouldn’t pay extra for a shirt
because the salesperson folded it neatly on the rack, so unless the
dealer has done something beyond basic preparation, you should refuse
to pay this fee.
2. Documentation fees
This covers the cost of the paperwork the dealership must do when
selling a car. Requirements vary by state, but the actual cost to the
dealer is almost always well under $100. Learn your state’s
requirements and don’t pay more than you have to.
3. Dealer-installed accessories and extended warranties
These are extras that you shouldn’t pay for unless you requested them.
If you do want these extras, you should shop around to make sure that
the price the dealer is charging is fair.
4. Floor plan fees
This is the fee charged by the dealer to keep the car in inventory.
Just like the example above, you wouldn’t pay more for a shirt because
they have the color you like in stock. Why would you do the same do a
car?
5. Administrative fees
This one is tricky, because while it can sometimes be a catch-all that
allows the dealer to make a few extra bucks, or it can be a legitimate
expense charged by the manufacturer. Ask to see the invoice, and check
it against the VIN number of the car you’re buying. If the admin fee
is there as a line item, it’s a legitimate cost. If not, you should
refuse to pay.