Dealership fees and add-ons can add up to hundreds and even thousands of dollars, but that doesn’t mean you have to pay them. It’s no secret that dealer markups are ruining car buying. This guide to car dealer fees will help you understand common fees, spot hidden or fake charges, and learn how to avoid them.
Common Car Dealer Fees
When purchasing a vehicle, it’s essential to be aware of the legitimate fees and taxes that make up the out-the-door price. These fees are typically imposed by the government and vary by state or local jurisdiction.
Find out how much your next car will REALLY cost with this free out-the-door price calculator.
Here’s a closer look at some of the most common legitimate fees and taxes associated with buying a car.
State & local taxes
Buying a car comes with a whole host of taxes. These include city, state, and county sales tax, personal property tax, and often a vehicle license tax, which has to be paid annually. These all vary from state to state, and in the case of sales tax, in even smaller jurisdictions.
Title, Tags, and Registration
In addition to taxes, there are a handful of other legitimate fees that are imposed by your local government. Title, tags, and registration fees are all par for the course when purchasing a vehicle.
The title fee is charged as a cost for the documents required to transfer the title, the cost for this fee can range from $4 up to $150 depending on the state.
Registration fees, charged to cover the cost of registering the vehicle under the buyer’s name, can vary wildly. Some states charge a flat fee, some charge based on weight, while others charge based on how old the car is. Our out-the-door price estimator will help you get a sense for how much your state’s registration fees will be.
Tag fees relate to the physical plates you need to carry on the vehicle. Again, this varies from state to state, but know it is another fee you should be prepared to pay.
Doc fee
Doc fees straddle the line of legitimate and illegitimate. Know that you can and should negotiate the doc fee with a car dealer. Also know that the dealer will never actually remove the fee from your buyer’s order, instead they will reduce the selling price of the vehicle by the same amount as the doc fee.
Doc fees change from state to state and from dealer to dealer. Many states cap doc fees to prevent dealers from exploiting them. For example you’ll never see a doc fee of more than $85 in California, whereas in Florida you’ll frequently find dealers charging upwards of $1,000 for a doc fee. In some states it’s the wild west.
Be Prepared: Car Dealer Doc Fees by State
How to Spot Hidden Dealership Fees
Read the contract carefully: Make sure to review the sales contract thoroughly and ask the dealer to explain any unfamiliar fees or charges.
Look for inconsistencies: Compare the fees listed in the contract to the fees mentioned during negotiations or in advertising materials. If there are discrepancies, ask the dealer to clarify or remove them.
Research online: Check out resources like CarEdge to get an idea of what fees are typical for your area and vehicle type. This calculator and this guide to doc fees are great places to start.
Need some help? Our Car Coaches are ready to assist today! Learn more about how to get started.
Fake Fees to Avoid
These are the most common hidden fees you shouldn’t feel pressured to pay:
Some dealership fees add no value to your car and should be included with every new and used car at no additional cost. These are essentially fake fees that solely exist to make the dealership more money. Always avoid these fees:
- Vehicle Prep Fee
- Dealer Prep for Delivery Fee
- Pre-Delivery Service Fee
- Pre-Delivery Inspection Fee
- Reconditioning Fee
- Additional Destination Fee
- Cash up-charge
It’s very important to remember that these fees add no value at all to your car, whether new or used. All of these so-called services should be included in the selling price of the vehicle, no ifs, ands or buts. Having trouble negotiating fake fees? Our CarEdge Car Coaches are always here to assist.
‘Almost Fake’ Fees
These car dealer fees add little value despite potentially costing hundreds or thousands of dollars. If you don’t want the product, these fees or ‘add-ons’ are always negotiable:
- Etching – You can find it elsewhere for significantly less.
- Nitrogen-inflated tires – The benefits are minimal, and air inflation works just as well.
- Pinstripes – These are often overpriced and can be done cheaper elsewhere.
- Paint protection – A wax job at a local shop will likely be more cost-effective.
- Additional dealer add-ons – Beware of dealers trying to upsell you on unnecessary extras.
- CarFax fee – If you’re engaging with a reputable dealer, there is no reason why you should have to pay for a CarFax or AutoCheck report.
👉 Know before you buy! Estimate your future insurance costs with our free car insurance calculator
The Complete List of Dealership Fees
All of these add-ons and dealership fees are negotiable. Not a single one of them is required, no matter what a salesperson tells you. They’re not like the taxes, title and registration fees that you should expect to pay.
Examples of Dealer Fees Negotiated
Our CarEdge Car Coaches help thousands of drivers negotiate better deals on their car purchases every month. We’ve seen it all! Here are three examples of ridiculous dealer add-ons and B.S. fees that we’ve helped to negotiate off of the out-the-door price.
Who on Earth would agree to pay $3,000 for a protection package when you could apply those same products for a few hundred dollars elsewhere? Overpriced paint and protection fees are always negotiable.
Some dealers seem to think that if you can afford a new truck, you won’t mind paying a thousand dollars extra for unwanted dealer add-ons. Always negotiate these fees.
Two grand for a safety and security package? Nope, nope and nope.
And then you have this… a whole slew of dealership fees and add-ons that are VERY hard to justify.
Remember, You’re In Control
You should never feel pressured to pay for something that doesn’t add value. Our #1 tip for negotiating car dealer fees is to enter the deal prepared and empowered with knowledge. By being prepared, thoroughly examining contracts, and negotiating wisely, you can minimize surprise fees and secure the best deal possible.
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good stuff.thank you
Im getting a custom truck built next year and the dealer told me they charge 600 for their reconditioning fee i understand its bs on a used car but is it necessary on a new one.
No, that is complete BS! Even on used cars that is a bogus fee. Negotiate that off!
So its bs on new cars even more on used?
Do you have to pay a destination and handling charge for a used car, same as new?
I watched video from the peeps that tell you tips . That said never pay destination fee on used
Anytime a dealer includes add-ons like “ProtectionPlan”, I immediately walk. I have no intention of doing further negotiation with any dealership that tries this.
Wtf is a non tax fees?
Hi,
That would be a blanket term for any fee that the dealership has that is not a state or local tax. For example, a processing fee or documentation fee would be considered a ‘non-tax fee’.
I got approved for a 4500.00 car through dealership and when plates came in I was called to come and sign paper work. I already had car and they said my loan was for 8500.00 because of fees for registration taxes and a 2000.00.dollar service fee. I didn’t know I could refuse anything and I had already paid 500.00 down payment. I don’t know what to do. I can’t afford that much money. I will probably die before loan is paid leaving this on my kids. I thought they were honest
Wow, sorry to hear about this. I would ask for the $500 payment back via refund. I hope this worked out for you.
More info on lease deal ‘s
Love your analyses, Zach
Hello
Should a reconditioning fee be almost $5000 added
No, that is ridiculous. What dealership?
Toyota Vandergriff in Arlington
I haven’t signed paperwork yet appointment is at set at 9am but i need to know how to get out of that ridiculous reconditioning fee
Terrible. I’d find another dealer. Their price with the fee could be competitive, but you’ll need to research that: https://caredge.com/report
How can you justify the negotiation of additional installation fees to be taken off the purchase price? If it’s installed already, and they “can’t take it out/off”, and I don’t want it in/on the car, what do I tell them?
Brianna, we recommend asking for them “at cost” instead of at the retail price. That’s usually a good middle ground.
A doc fee is not legitimate, period. Those fees do not straddle the line between legitimate and illegitimate. It is a FAKE fee.
Dealers sell at a price. Price includes all dealer costs plus profit or loss. The minor costs associated with documents is a dealer cost. Hence, those minor costs are part of the price.
There is no legal reason why a car dealer must charge a doc fee nor is there a legal reason a dealer cannot remove a doc fee. The inclusion of doc fee or the non-inclusion of a doc fee is solely a decision by the dealer. When a dealer states they cannot remove the doc fee what they are saying, as noted, is their attorneys have advised them removing the fee from a contract risks being sued by people who paid the fee.
Regardless of whether the dealer includes the fee on the contract, they buyer as no legal obligation to pay the fake fee. The smart buyer will reduce the price by the amount of the fake doc fee.
Why supposed consumer advocates drift to suggesting or stating doc fees are legitimate is a disservice to car buyers.
Depending on the state doc fee is legal, some state doc fees are regulated such as NY state, supposedly cannot charge more than $75 for doc. states like NJ are unregulated so they can (and do) charge what ever they want.
This is correct. I’ve never paid a Doc Fee. How did I do that? When I see it written down, I take out a pen, cross it off, and say, “I don’t pay Doc Fees”. If they start to give me guff, I get up and walk away. Typically they are eager to drop the car’s price by that amount to keep me on the lot.
I bought a used car and they charge me documents processing fee $960.00 pre delivery inspection $979.00 destination charge $995.00 reconditioning fee $5900.00 you think I can sue them
Thank you
After viewing your very helpful and valuable video on fees, am I to understand that when buying a USED vehicle, I should negotiate the fees AFTER settling on a price or before? And should this negotiation be with the salesperson or the finance/insurance person? Thanks for your assistance. Cheers!
I am purchasing a truck that was advertised for 7995. Now they want to add 2000 for dealer prep. Is this legal? I keep reading an advertisement price such as Carfax should include such fees. But I’m not sure
Legal, yes, but we do NOT recommend agreeing to pay for it. Wow!
What is the best way to find the dealer invoice? Love the videos keep them coming… jimcatlette557@gmail.com
Yrs. ago that was called ” writing up a sale,, DOC FEE IS A SCAM. Dealer said ” i cant remove the doc fee,, I said ‘ SURE YOU CAN, YOU PUT IT IN THE COMPUTER.,I said ‘ YOURE MAKING $250.00 OFF OF ME EVEN B/4 I SIT DOWN AT THE TABLE. I said, see ya’ later,, and left..Funny that that law was made to help the dealers? How about a law that say, ALL DEALERS MUST give a 30 day warranty on used cars.? ThaT WAY DEALERS CANT pawn OFF THE JUNK CARS ON THE BUYERS. Also, its the LAW that if you ask a dealer who had the car before you, he MUST tell you. Dont let that thief say, cant tell you because of the privacy law. One tried that crap on me until i showed him on paper that he MUST tell mew who had the car b/4 i buy iit. ALSO, DEALERS CANNOT, CANNOT sell a car that not safe to be on the road., like bad frame, brakes, etc,,yes thats the law too. ALSO if you buy a car and dealer doesnt have the sticker in the window,, HE CAN BE FINED. ALSO if dealer lies about the price of the car on the TITLE, he can lose his license.[ fraud ] Yes, i looked all this up. DO NOT FALL FOR THE ” CAR SOLD AS IS CRAP ‘” Especially if dealer knew brakes/ frame was bad. After i got the name of the previous owner b/4 i bought car. he told me NOT to buy the car, which i didnt..
I have a dealer charging me “Accessories Fee” of $800. Because of what the car has. Is this a real fee? THANKS!!!
If it’s taxable … it’s negotiable! Push back on this “fee” please!
What is a cost of compliance fee? And , should I have to pay it when buying my used car. I asked what the Services Fee was and they told me it was for cost of compliance.
No it’s a fake fee. tell them your not paying it.
Should I pay a Government Fee of $103.50? I live in Ohio. Only other fee was the proc/doc fee of $300.00.
Please check the out the door price estimate for the VIN in your CarEdge account: https://app.CarEdgemember.com/
What is the “Government Fee”? is it a tax, a luxury tax? The only true fees are state fees and they are called TAXES, such as state tax, luxury tax, some states might even have an a tax for vehicles that over produce or put out too much emissions due to state emission laws, but that is mostly commercial vehicles and large heavy duty trucks.
very useful info, thank you very much!
I went to a car dealership last week and they showed me the “reconditioning fee 1.8k” + ” cash up charge 1.9k” to push the selling price up to sky for a 2018 model. While I did not know these non-legitimate fees, I felt the price was too high for the car, so after a lengthy negotiation , I walked out of the store without any regret, the sale manager was very pushy and rude too. I feel more confident to deal with car purchasing next time after reading your article.
You did good Lynn, if you feel uncomfortable, just walk out. “Reconditioning” should be done anyway to make the car ready for sale, it’s part of the cost for the dealership, what are they gonna do sell unreconditioned vehicle? Nobody would buy them! Who is gonna buy a filthy, unclean, UNSANITIZED!, car especially in the time of Covid-19!
“There are legal cases where dealerships have been sued for removing doc fees for some customers and not others.” Do you have case cites for any of these legal actions? If so, please provide them for me and I will look them up to see if the plaintiffs were successful in their lawsuits. Let me know. Thanks.
AZ dealerships love to charge a “window tinting fee.”
1) How do I know if THEY actually did this (vs the used vehicle already having them)
2) In this case this really is something they can’t remove (if in fact they did it), but how do I determine what “at cost” is?
Lindsey, great question! I’d highly recommend asking it in the CarEdge Community: https://community.CarEdgemember.com/home
Thank you for the great advice! I just got the run around with a dealer after spending way too much time just to be told I would have to pay an additional 2K in extra fees.
After I decided to purchase my used vehicle, the dealer tried to apply a $600 fee for some type of coating they applied to the surface of the vehicle that supposedly lasts for 5 years. Totally unable to know if it was legit or not, but I got them to cut it in half. It was not in the advertised price. Was this legitimate to add when not part of the advertised price?
Ray / Zach
We needed to purchase a vehicle for my wife . I came across and watched many of your YouTube videos and signed up to your service for a month ( for the time we would be looking). I had never heard of an out the door price ( OTD). Basically using your information to negotiate I ended up walking out of 5 different dealerships here in Florida ( much to the agitation of my wife and we honestly both started believing that dealerships simply did not care or were unwilling to entertain these negotiations ( nitrogen, recon fees etc……) Thankfully we stayed the course and found a dealership that was honorable and reasonable in negotiating ( Just as you said we would). From the start they were willing to give me an OTD price which did not include some of those crazy fees. Even upon arriving in the finance office where I used some of your suggested terminology All went well. I could tell that they knew I had done my homework and the process was really relaxed. As required they did offer the add on’s etc…. but I politely declined and we proceeded ( just as your videos state). The bottom line is your information made all the difference and I want to thank you for this and for helping me to come through looking like a seasoned car purchaser to my happy wife. 😂😂 Thank you and keep up the good work.
Wish I’d seen this sooner. I feel totally taken advantage of. Cheated and lied to, too!
Yep, they got me for a $3,000 accessory fee. Again, saying it is mandatory on all their vehicles. No paperwork that explains what the package covers.
I went in for a $16,000. Vehicle, thinking the payment would be close to $300. A month. Walked out $34,090 later wanting to cry. Thinking? What just happened?l I now have a payment of $460. A month for 72 months. And in AZ there is no buyers remorse, or whatever rip off word they care to use. I cannot believe they can get away with this b.s..
Deb, I’m with you. The same thing happened to me just days ago. I feel your pain. I thought I knew what I was doing, but boy, was I wrong! Fees, warranties, so many extras that I didn’t realize I could negotiate or decline. I’ve been pretty upset with myself. The positive is that I am now much more educated after watching these videos and such. I will NEVER be taken like this again when buying a car, especially from a dealership.
Just as a little additional info, North Carolina dealers got our legislature to pass a law to the effect of if they charge a doc fee on one car they must charge the same fee on all other cars. Very few dealers in NC don’t charge a doc fee. Think about it, if you want money you can rob some one, which is illegal. Or, you can legally rob them by overcharging them for what they buy.
The Addendum shows this as an addon EcoPro, GPS, and Courtesy Guard addons?
2022 Jeep Grand Cherokee Limited (New)
Addendum Accessories:
EcoPro: $1799
GPS: $999
Courtesy Guard: $799
HB Paint & Fabric Protect: $899
Negotiate them all! https://caredge.com/guides/challenge-dealer-add-ons
Looking to buy a used car and getting this on the invoice:
“$8XX processing fee and a VA dealer tax”
What’s a “dealer tax”?
Also, is the doc fee based on the state you’re buying the car in or the one you’ll be registering it in?
Thanks
Chase, I have no clue what a dealer tax is. Try asking on the community forum please: https://community.caredge.com/home
The doc fee is based on the state where you purchase the vehicle. Taxes are based on where you register the vehicle.
Is a shipping fee on a new Kia for sale in New Mexico a fake fee? On every new car at that dealership, adding 1200 to MSRP.
Eloise is it on the window sticker? If so then it is legitimate. If it is an additional fee then you should negotiate that!
What about an electronic filing fee, is that a legitimate fee? I live in FL and am interested in a used Toyota Sienna with Autonation. On the itemized price sheet they have the following listed:
-Selling price
-Sales tax
-Electronic filing fee ($199)
-Registration
-Dealer services fee ($995) and there is a notation about the dealer services fee that states “This cost represents costs and profits to the dealer for items such as inspecting, cleaning, and adjusting vehicles, and preparing documents related to the sale”.
I asked if the dealer services fee was negotiable, especially since I may be interested in purchasing 2 used vehicles from them, but I was reminded of their business model and that they do not negotiate the price at all. I agreed that I understood the sale price is not negotiable, but what about the dealer services fee that clearly states they are for profit and cleaning fees that should already be included with the sale price. Are places like Autonation able to be negotiated with on these fees at all?
Are these fees high for Florida?
Fees form Bill Currie Ford in Tampa, FL
Doc fee: $1199.00, saw state average is $999.00, should I request this be lowered to state average?
State and Local Taxes: $2041.53 on a 25143.00 purchase, seems high!
Total License and Fees: $389.35, seems high as well.
Trying to buy a used car in Florida and the fees look ridiculous
Aht advantage 1,995
Electronic filing $559
Private tag $199
Pre delivery $995
Are all these legit?
Comment *
I just purchased a used car there was a contract fee and maintenance fee total 3500.
I asked about but didn’t get a straight answer. I bought a used car from them before those charges were not on it.
Sally, those sound like BS fees. See if you can cancel the “maintenance fee”. Check here: https://caredge.com/guides/how-to-cancel-your-extended-warranty
I love you guys. Thank you for sharing your knowledge.
my local subaru.. in newton nj. on their web site says they charge a $799 doc fee. i know it does not cost that much in nj to register a car.. so what is that for. [they also charge or say you have to pay: Tax, Title, License, Registration
We are WV residents looking to purchase a car that is in VA. Processing fee seems awfully high and I read that in VA “The decision to charge a processing fee is a business decision each dealership makes at its discretion.”
Price – 30,997
Processing Fee – 989.00
Tax – 1919.16
Non Tax Fees – 177.88
No other fees attached to the purchase.
That is a very high processing fee, we would not recommend accepting that.
I have a quote for a new vehicle (Chevrolet) that lists a “SMALL SUV IPP” charge in the amount of $$871.60. Can anyone please help me to figure out if this is a fake charge? Thank you in advance!