Buying a new car isn’t always as easy as it seems. There are extra expenses to be considered apart from the sticker price. However, most buyers are unaware of these additional costs. This often leads to dealerships taking advantage of unwitting buyers who are unfamiliar with all the fine print.
To ensure that you save money on your purchase, here’s a detailed guide on what new car fees you should pay at the dealership.
Other than the original cost of the vehicle, there are additional costs that you must pay for. These add-ons are non-negotiable. Every customer will have to pay these extra costs before driving the car out of the parking lot.
Many dealers help with the registration process of the vehicle. For instance, it may assign the title of the car or order the license plate. The dealer will charge you for the registration and title. It’ll then submit those to the state vehicle agency.
If your state collects sales tax on the purchase of vehicles, then it’d be included in the car cost. If you’re purchasing from a different state, the dealer would submit the sales tax with the vehicle agency of your state after deducting the trade-in value from the sales price.
Documentation expenses help the dealers in preparing all the required paperwork and sales contracts needed for selling the vehicle.
Depending on the state and dealership, the documentation costs range from $50 to $500. In some states, it may be more or less. For some, the charges might be negotiable. Some dealers might sell the vehicle at an attractive price; however, they later add high documentation charges to the contract.
In addition to the mandatory expenses mentioned above, there are other aspects that you can easily negotiate and even get removed from the total bill.
Many dealers add advertising expenses to the total cost of the vehicle. This helps to cover all the expenses and costs for advertising the vehicle. This charge is argued the most when purchasing a car. It’s highly recommended that you avoid advertising costs altogether. You can do this by negotiating with the dealer.
Preparation expenses are included in the sales contract when purchasing a brand-new car. These extra costs are also negotiable. The fees are collected to help pay for any preparation the vehicle may need before a sale. This includes things like washing it, giving it a finishing touch, checking the parts, and so forth.
Did you ask for a specific color, model, or feature in the car? If yes, then you’re liable to pay destination and transportation costs to the dealer. This expense is charged for the upgrade demanded, along with the shipment charges of the vehicle to your local dealer. If the vehicle is already waiting for you in the lot, then you’ll want to ask to get these costs waived.
Want to extend the warranty period for your vehicle? Many dealers offer extended warranties or other maintenance plans at the time of purchasing the car. If you opt for any such plans, you’re liable to pay for the optional services. Such charges are also negotiable depending on the features, price, and plan you’re willing to add to your purchase price.
Credit insurance is an optional charge for buyers. The insurance plan covers the remainder of the auto loan after any accident. Again, depending on your insurance plan or policy, coverage might also kick in if you lose income, become disabled, or die. Gap insurance is also optional, yet essential if you’re leasing a car. GAP insurance is capable of covering the difference between the value of the vehicle and the loan when stolen or totaled.
Dealerships charge you to get the vehicle identification number (VIN) etched on the car’s windshield. This helps stop thieves from being able to remove the VIN before selling the vehicle. Instead of paying a higher price at the dealer, you can always get it done at a store or do it yourself with a DIY kit. Such kits cost less than $20.
Learning about the various taxes and costs involved at the time of purchasing a vehicle is an essential part of the purchasing process. Keep a close eye on every expense that’s involved in a car purchase. Moreover, negotiate with the dealer to get a vehicle in your budget.
