Why dealer fees

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Some common fees you should look for include destination fees, documentation fees, and title and registration fees. But with some fees, you may be able to negotiate them and sometimes even compare dealerships to save money on your next car. These costs are either taxes or dealer fees that the dealership will pass on to the consumer — or fees that are included in the car-buying process.

You should keep these costs in mind as you consider how much car you can afford. Financial Fees When you sit down with the dealer's financial office, there are several fees you may encounter.

Credit insurance. According to Nerd Wallet, credit insurance covers your loan or credit card purchase if you can no longer make the payments. For instance, if you become disabled, lose your job, or are killed. GAP insurance.

This fee is typically added to a lease. However, if you are buying the vehicle ask if it can be eliminated. Loan payment fees. As you negotiate your vehicle price, your dealer may offer you a loan through their company. While it is convenient you will pay a fee for making your payments because the dealer needs to pay their bank. Market adjustment. This fee is often applied to new vehicles. It is not mandatory and worth looking for a discount or elimination.

Remember the more you pay upfront the more the car depreciates as you own it. Fees to Negotiate Negotiations are a large part of closing a vehicle sale for both parties involved. As you look over the paperwork for your new purchase or fees come up in conversation, make counteroffers Dealer preparation. It covers the cost of having your car washed and ready for you before you drive off the lot.

Ask if they require this or if you can take it off the lot as is and avoid the fee. Another destination or transportation charge. If you have your heart set on a specific vehicle, but it is not at the lot you are doing business with they can have it shipped to the lot. You can either pay this fee or go to a different lot. If they ask what it will take for you to stay with them, ask if they will cover this additional cost. Optional Products There are a number of optional behind the scenes products you can add to your vehicle.

Extended warranties. This option gives you the chance to protect your vehicle beyond certain limits covered by your manufacturer. Dealer maintenance plans. The dealer sets these terms and often covers a variety of services for this extra fee.

Vin etching. You can have your vehicle's VIN number etched into your windshield as peace of mind against car theft, but it is not required. Avoid the fees that cover things like tint and pinstripes. If you're wishfully thinking the arguably downright shady dealings of car dealers go no further than doc fees, think again. There are plenty more. Better said, they pass those expenses right along to the buyer. Experts warn to be highly aware of reconditioning fees and for buyers to seriously reconsider purchasing a used vehicle from a dealership that charges reconditioning fees.

That's why many experts consider destination charges to be a sham, especially with new cars and especially if you happen to see it listed separately from the MSRP. Even to cover its own marketing costs, a dealership may attempt to collect an advertising fee.

The truth is the dealership should add this expense to the car's price to begin with, rather than billing it as an additional charge. Next we have what's known as a nitrogen fee, which the dealer charges a coy extra hundred dollars to simply fill your new ride's tires with nitrogen rather than regular air.

This is based on the hokey idea that nitrogen molecules are larger than oxygen molecules — which is true, by 2. If you happen to be paying for your vehicle in cash rather than credit or financing, some dealers will actually charge you an additional fee for that, too.

Because many dealers make humongous profits behind the scenes of your contract by way of upselling your loan or slyly adding on extra costly warranties. Experts also warn against allowing a used car dealer to force you into paying for a vehicle history report, too, as they surely already have access to them.

Shift uses powerful machine learning algorithms and loads of data to deliver fair, no-haggle prices from the start. What's more, each Shift vehicle comes with a vehicle history report at no extra charge, too, so you can know the car's complete background before you decide to buy or not.

As you begin your quest for a new or used car, truck or SUV, it's crucial for you to do your homework ahead of time — essentially by reading articles such as this one — so that you know what you're getting into. That way you'll understand the various fees and taxes — both legit and not-so legit — that are associated with the car purchasing process.

Remember, knowledge is power, especially when it comes to purchasing a vehicle. Understanding car dealer fees ahead of time will undoubtedly lessen the odds of a salesperson swindling you with a bunch of fast talk.

The views expressed in this article do not necessarily reflect the views of the author or Shift Technologies, Inc. Shift does not endorse or evaluate the accuracy of any claims made or data provided by third party sources referenced herein. We are making such material available in our effort to advance auto education. We believe this constitutes "fair use" of any such copyrighted materials as provided for in Section of the US Copyright Law.

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