Notwithstanding the cost of a home, commuting by car typically accounts for the largest portion of our monthly expenditures. People are always looking for a good deal, especially as new automobile prices continue to rise.

Nonetheless, car lots need to earn a profit, and a common way they do it is by taking on a slew of hidden extras to the sticker price. Some merchants may go out of their way to conceal costs and surprise you with a hefty invoice.

What Do Dealer Fees Often Cost?

Dealer fees often amount to 8-10% of the purchase price of a vehicle. But they can change based on the kind and model of the automobile you're buying and the dealer's expertise at squeezing as much cash out of you as possible. In most cases, some form of dealer charge is required by law. The rest are open to discussion. The fees charged by auto dealerships may add up quickly, whether you're purchasing a new or pre-owned vehicle.

Location Fee

The price of transporting a car from the factory to the dealer is known as the "destination fee" or "freight charge." Car lots usually charge customers this tax but don't include it in the price tag.

The manufacturer's suggested retail price will be prominent, but the destination cost will be buried deep within the small print. Depending on the vehicle's mass and the distance it must travel, destination fees commonly increase the base price by an additional $900 to $1,500.

This is nearly twice as high as a decade ago and is a regular source of frustration for many people during car buying. Destination fees may add $1,050 to the price of a new vehicle. If they seek to eliminate excess inventory, dealers are likely to waive this fee.

Dealer Preparation Fee

A "prep fee" is an extra charge certain vehicle lots impose. The expense of getting the automobile ready for sale, which includes cleaning the paint, testing the fuses, and filling it up with gas, is included. It normally takes less than an hour to get ready.

The dealer may have to spend as little as $100 on labor and materials to complete this, but they may try to charge you several hundred. Regarding dealer prep, several establishments now charge a proportional amount based on the manufacturer's list price, up from an initial flat rate.

If you see this charge on your bill, negotiating a lower total is worth a shot. A dealer shouldn't try to charge you more than necessary for preparation because it's part of their regular overhead.

Vehicle Registration Fee

Your dealer will charge you an administration, registration, or doc fee to handle the paperwork at the DMV on your behalf. For a price of $80 or less, this is likely a worthwhile investment. Some dealerships, though, charge as much as $600 in paperwork costs.

Companies who treat their customers like way are aiming to rip you off. You should consider paying more than $200 for the paperwork. Several jurisdictions have even established legislation capping the amount of money dealers may charge for DMV paperwork or registration fees to curb this practice. As an example, the legal limit in California is $55.

VIN Etching Fee

An increasing number of automobile insurance companies recommend that their customers have their vehicle identification number engraved into visible areas such as windows and engines to deter theft. Vehicle identification number marks make it difficult for thieves to sell stolen auto components without leaving a paper trail.

Vehicle identification number etching is a lifesaver if you reside in a region rife with auto theft. If not, there's no need for it. Some car lots have reportedly charged as much as $400 for this service to be completed during the sale process, which is ridiculous. You may accomplish the engraving yourself with a kit that costs as low as $20.

Paid Promotions

It is also uncommon for vendors to try to tack on an "advertising fee" for newspaper ads, online banners, and commercials. You should never pay advertising expenses, regardless of the invoice's labels.

Because, really, what company forces its clients to foot the bill for the ads that promote it? Car lots will promote vehicles at steep discounts but then add on advertising fees of up to $1,000.

As a result, the price reduction is mostly symbolic. You'll need to use some deception to get your foot in the door. If the entire cost, including marketing, is higher than the sticker price, you should negotiate a reduction or go elsewhere.