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What New Car Fees Should You Pay? Posts: 10,059
edited April 2017 in Editorial
imageWhat New Car Fees Should You Pay?

Car-buying fees are confusing and costly for buyers. Find out ahead of time which new car fees are legit.

Read the full story here


  • pnwson_pnwson_ Posts: 1
    A few months ago I read an online article that contained a list of tips to help people buy a used car. One of the tips was to be wary of "doc fees" that can get added to the price of a vehicle. Now it's a couple months later, and after exhaustive research and a couple of casual forays out looking at cars, I went out tonight to test drive a car that I really felt would be the car for me. The test drive went fine; the car was really tight, everything seemed to work. It was a used car with 86,000 miles at a major brand dealer. So we went inside after I indicated my interest in buying it. That's when I was told that in addition to the advertised price, there was a $499 doc fee. This on a six year-old vehicle. My jaw literally fell open, and I flatly refused to pay it. I actually felt insulted that they would even try to make me. Now if I were buying the latest "must have" brand new car like a Chevy Cruze or Ford Focus then sure, I would probably be stuck paying it. But I did have options, namely all the private party sellers in addition to hundreds of small-name used car lots. THEY hopefully wouldn't be foolish enough to stick me with such a ridiculous fee. The end result was that I got them to drop the base price (because just like this article states, they refuse to drop the doc fee) to eliminate the effect of the doc fee, plus another couple hundred dollars. It was all I had been looking for in the first place, but it felt like I had to pull someone's teeth out to get it.
  • mzzdamzzda Posts: 1
    In New York the doc fees have gone up to $75 as of 06/23/11. I confirmed this with the DMV and Atty General's office after Bay Ridge Nissan illegally tried to add a doc fee of $398 on top of the sale price. Call the DMV, they'll tell you they've had issues with this dealer. I'm posting a full review as well.
  • Average registry fees charged in Nebraska are $86? I don't think so! With the wheel tax and all the other crap Nebraska adds, I have never paid less than $150 to register my 1998 Chevy Malibu, and my 2009 Elantra cost well over $250.
  • Did pwnson say the Chevy Cruze or Ford Focus was a "must have" car? LOL!
  • FYI: Texas's auto sales tax is 6.25%
  • I was told that there was a $500 delivery fee on a used car at a dealership even though the car is on the lot. Is this legit?
  • In Illinois, and maybe elsewhere, dealers may try to include "Vin etch" for around $300. This happened to me at Golf Mill Ford. This comes with their "final price," which they ask customers to accept as a package. It is really a specialized insurance for car recovery in the event of theft. You may already have it. But, with it appearing in the set of fees that you have to sign, you could be pulled into buying this. Unless you are buying a car that is in a category of likely auto theft models, chances that your car will be stolen are pretty slim. Chances that it will be stolen and not recovered are slimmer. You probably do not need this insurance.
  • I found a car out of state. How would that be handled?
  • tboostertbooster Posts: 1
    Should I be paying Documentation fee when I paid cash for the vehicle? Exactly what service(s) those finnacial people did for me other than them wasting my time trying to get me to buy things I don't want? Most dealerships do have some really hot chicks to do those types of job.
  • Oklahoma doesn't charge sales tax per se, it's an excise tax that is 3.25%.
  • igozoomzoomigozoomzoom Waleska, GeorgiaPosts: 801
    Effective 03/01/2013, Georgia no longer charges Sales Tax on Vehicle Sales. Instead, a new Title Ad Valorem Tax (TAVT) is charged at the time of of sale (6.5% in 2013, 6.75% in 2014, 7% in 2015).
    2015.5 Volvo S60 T6 Drive-E Platinum, 2012 Mazda CX-9 GT
  • Hello everyone! I am desperate for answers on this one. The new GA TAVT law is really vague when it comes to leases! My Hyundai lease was scheduled to expire this month, so I decided to lease a new Mazda and trade in the Hyundai. Last Friday, I traded it in to a local Mazda dealership with the understanding that the trade would reduce the amount of TAVT tax I'd owe for the new Mazda I'd be leasing (I calculated it on DOR's website using the vin numbers). However, the sales rep informed me that I was not going to get a Trade In reduction because I was trading in a lease and had not paid any sales tax on the vehicle. So they told me that they'd subtract the $1600 credit from the $1845 I owed in TAVT taxes, and the remaining $245 would be rolled in to my lease payments. A part of me feels like they might be trying to take advantage of me. They seem to be treating it like a turn in and not a trade in.
  • I believe that these doc fees are getting out of control I could be ok with maybe 250.00 cap but in Va Ive seen them as high as 999.00 now that is getting out of control and then people complain about regulations but it's taking advantage of consumers on that level is what brings attention to dealers as it should when they go that far
  • And that etch is BS too I sold new and used cars in Va dealer cost for etch was 20.00 and Then the idiots in prep would install them crooked and look like crap on your windows and it can't be removed
  • How can Edmunds have an article on new car fees and not include mention of "destination fees"? Edmunds builds the destination fee into its "TMV" yet this article does not even mention it. Are we to assume that buyers must pay this fee in full? Or not? This doublespeak seems downright disingenuous to me and I had trusted Edmunds as a source for objective car buying information but now I am not so sure.
  • Super article. I'm in Asheville, NC. We've purchased three cars in the last 8 months. The first from a dealer in Hickory, NC. They said everyone charges a documentation fee. I placed a call to the same brand dealership (they sell used cars and have the same name) elsewhere in NC and that dealer didn't have a fee.

    That used car was recently sold for a new car. There were documentation fees at both dealerships we went to. What bothers me the most is one dealership added a pre delivery and post inspection under "dealer ad-ons" with other items and that came to $1900. The individual item costs weren't listed. I talked to the sales manager today about that particular list and asked why those items were on the list - I'm a senior (just hitting that milestone) - and have never seen it. He explained it but it was fluff to me - like the can of tire inflator that's given to many these days instead of a spare donut.

    I come from NY and never saw any of these ridiculous fees. I'm sure we were had. (Well, I was - I was sold an AWD used car - written on the invoice from a dealership, had it inspected at my mechanic and later learned it was a FWD... BBB, no one could do anything about it.) NC will likely never do away with these fees and dealerships are scrambling to make money. A doc fee is a way of getting it.

    I don't expect to come out of this recession (call it what you want). As that happens strange things pop up. This is one of them.
  • triplesectriplesec Posts: 2
    Make sure you know in advance what Rebates are being offered. These typically originate from the Manufacturer and NOT the dealer .. but the dealer would like you to think they were being generous when you would be receiving the discount regardless.

    Another thing to be cautious of is the dealer adding the Tax, Doc Fees and other Fees into the loan. It would always be best for the buyer to pay those fees in cash, in comparison to adding them to the total loan and thereby paying (with interest) over the entire loan term.
  • triplesectriplesec Posts: 2
    It's always a good idea to shop around for a loan in advance of talking with the Dealer's finance (snake-oil) sales team. Dealers have been known to obtain a rate from one of their affiliated banks and then mark it up 1% and pocket the difference. Know your credit score and obtain a pre-approval for a loan. This is easy to do, since all you need is a ballpark amount which can be obtained with some time and research.
  • Is it possible to get official document about "are incentives taxed" for Pennsylvania. The link takes to Penn Dot and I could not find it on PennDot. I need it to show a dealer.
  • fandswfandsw Posts: 37
    edited March 2015
    Your Alabama Sales Tax numbers are WRONG. I've never paid over 2.875%, and I have no idea where you got such a high number from, which is even higher than the Alabama General Sales tax rates.
  • agentorangeagentorange Posts: 893
    The "doc fee" scam in Nevada is nothing short of criminal IMHO. The DMV charges $33 and they dealers here typically charge $400. Bag. That. Noise. I've walked away from deals at car lots that refuse to charge a more reasonable level.
  • MichaellMichaell ColoradoPosts: 125,051
    Just adjust your offering price to mitigate or eliminate the fee.

    Did you get a good deal? Be sure to come back and let us know! Post a pic of your new purchase or lease!


    2015 Subaru Outback 3.6R / 2014 MINI Countryman S ALL4

  • masterncmasternc Posts: 14
    PA's doc fees may be low because most dealers add a separate "messenger fee" to process the DMV paperwork. That can vary widely.
  • phill1phill1 Posts: 319
    Dealer Doc Fee`s or Dealer Prep Fee`s are bogus profit margin boosters and nothing else. The Car gets a Wash Job and the Buyer gets a "Hose" Job! To avoid paying anywhere from $500 to $700 or more for absolutely nothing, if the "Fee" is already pre-printed on the Purchase & Sale Agreement and their GM states that (everyone) must pay it, agree! Simply state that on the appropriate lines above where Trade-In Allowance or Cash Discounted Allowance is added, that figure be (INCREASED) to the same figure as the Dealer Doc Fee is down below to offset that ripoff! If they balk, simply walk and go to another Dealership!
  • I'm looking at leasing the Maserati Ghibli in the near future. Is this vehicle worth the price tag of $89,000-$105,000 or is the Mercedes Benz GLE 63S AMG a much better deal for a similar price tag?
  • karhill1karhill1 Posts: 163
    Please Edmunds stop giving an suggestion those documentation fees may be valid. They are not!

    First, the only valid fees on a new vehicle purchase are those imposed by the government. Those are not a dealer cost and it is the buyer who pays those valid fees.

    A documentation fee is not a fee! It is a cost, a dealer cost associated with the preparation of documents. This is no different than any other dealer cost such as heat, power, office supplies, employee wages, etc. As a dealer cost, any cost associated with the preparation of documents is included in the selling price. Price by definition includes all dealer costs plus profit (or loss). That is basic cost accounting.

    Really, with today's computers the actual cost to the dealer to prepare paperwork is immaterial, probably much less than $50. Certainly nothing like the hundreds of dollars many dealers try to charge customers for documentation.

    The real purpose of a documentation fee is simply to deceive unsuspecting buyers. Dealer F&I managers, the real questionable people in any dealership, concocted this scheme many years ago. A documentation fee is actually the selling price separated into two parts, price and documentation fee. Dealers do this for many reasons, not the least of which is to have the ability to advertise a lower price which they hope will entice buyers to visit their dealership. Of course, they also hope this deception will increase their profit.

    Any intelligent car buyer knows the true selling price of a vehicle is the negotiated price plus the documentation fee.

    When I buy if I want a price of $20,000 and the dealer has a doc fee of $300, my offer is $19,700. I have yet to encounter a dealer who would not conceded the doc fee when questioned. My daughter recently bought a new Toyota. Dealer had a $200 doc fee. After negotiating the price, and on my recommendation, she questioned the doc fee. They dealer adjusted the value of trade to compensate for the doc fee plus $50.

    Most dealers now have the doc fee printed on the sales contract. This does not mean a buyer has to pay the fake fee. This is just another ploy by the dealer as an attempt to add some false validity to the fee. Another reason they pre-print the fee is to avoid a potential law suit. Dealers know they risk being sued if they do not charge the fee to everyone. Pre-printing the fee on every sales contract provides them protection from such law suits. However, the pre-print does not mean a buyer has to pay the fee. Simply have the dealer lower the price to account for the fee or have the dealer increase the trade value to cover the fee, as happened with my daughter.

    One thing to recognize is there is no law or other regulation which requires a buyer to pay the fee, even if printed. If a dealer F&I person states this they are lying. It might be fun, if the F&I person tells you everyone must pay the fee, to ask the F&I person to put that in writing. My bet is they will never put it in writing because that would allow them to be sued. Of course, if the F&I person suggests everyone must pay the fee really listen to what they say. Saying everyone pays the fee is much different than saying everyone is required to pay the fee. If they say everyone is required, do not hesitate to ask what requires everyone to pay the fee. Is it a law, regulation, or simply the dealer's policy.

    A couple of years ago, we were buying a new Ford. I questioned the doc fee and got an immediate consideration. What was interesting was another guy in the next cubicle was also questioning the fee. The dealer also gave him immediate consideration.

    The point is all buyers should question these fees. A buyer should never lay down and pay the fee. That simply encourages dealers to continue this charade.

    Anyone interested in an honest dealers view of these documentation fees should GOOGLE Earl Stewart on Cars. Stewart is a Florida Toyota dealer who provides real honest insight into a dealer's true objective. His take is quite enlightening.
  • isellhondasisellhondas Issaquah WashingtonPosts: 20,225
    edited October 2015
    People need to understand that making a profit isn't a bad thing

    People want to squeeze every last cent out of a car deal. They know what the invoice is, they know what (if any) the incentives are and they want to buy the cars for that number or even less!

    So they impose a doc fee in an attempt to make "something"/

    The buyers have no idea of the costs of opening the doors and doing business.

  • tonyg2016tonyg2016 midwest, usaPosts: 711
    Buyers have no idea of the true cost of the car thus making a reasonable offer with profit very difficult...
  • Doc fee is Missouri is limited by law to less than $200. So dealers generally charge $199.
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 64,490
    cheryl2 said:

    I found a car out of state. How would that be handled?

    You might get charged a transportation fee by a dealer if he's picking a car up for you---but it should be reasonable.

    Or are you referring to taxes?
  • On used cars, don't pay a "reconditioning fee". It has shown up in the DC area. It is said to cover the dealer's cost to recondition the car he bought to sell as a used car. But remember he paid less for the car, either as a trade-in or at an auction, because it needed reconditioning. Having already been compensated for the condition of the car by the lower acquisition cost, the dealer is seeking to be again compensated by the purchaser by collecting a "reconditioning fee".
  • I hope you all update this soon. Just went shopping this past weekend. One dealer has a $599 admin fee and the other $699, both in the same state, both non-luxury vehicle dealerships.
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 64,490
    Thanks for posting that!
  • EricSmitEricSmit MichiganPosts: 1
    As of 14 Feb 2019 Michigan's doc fee went up to $220.
  • AngusAngus Posts: 1
    Doc fees are a joke. Just an add on because they can. But folks, they can and do because we allow it. It's a cost of doing business. Look at the dealerships, they don't have that inventory, employees, utilities, and everything else by making money doing oil changes. They make a crapload of money on vehicle sales. They have most buyers fooled with the terms they use. Invoice is one. There are more than one invoice, you need to research this and realize hiw much they actually make. Don't get me wrong, they have to make money. Do they charge you a "trash" fee for disposing of the paper and plastic protection that come on new vehicles they remove and throw away? A "wash" fee? A doc fee, give me a break. It takes them mere minuted to do the paperwork. Tuff cookies. Cost of doing business. How about we charge them a "buyers" fee? I've currently made a trip, soon another to a dealer. I will have approximately 6 hours of my time, not to say close to 100 miles on my vehicle to "buy" there's. I'm going to add a buyers fee to my negotiation. Or maybe we can agree, it's simply a cost of doing business. On both ends.
  • berriberri Posts: 10,166
    A lot of them don't even give you a full tank of gas anymore either
  • mtnancemtnance North CarolinaPosts: 3
    and one more things folks. If you are with another person (family/friend) in the cubical and the sales person walks out to "check" with his manager or for any other reason, the phone is left on "open mic" so they can listen in to your "private" discussions of the deal, good or bad. This way, they are able to angle a sales pitch .
  • DaverceeDavercee Tampa, FloridaPosts: 102
    Hmm, better write these details down. Might come in handy.
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