What Are the Hidden Costs of Buying a New Car?
Most people know that the costs of buying a new car include the finance charges and the actual cost of the vehicle. They may also be aware of some of the other costs, but might not connect them to the car buying experience. There are a number of additions to the cost of new car sales, no matter where you purchase the car. This article will address these “hidden” costs of buying a new car.
This is one of those costs that everyone knows about, but don’t normally attach to the car buying process. In most states, the registration fees charged by the state are determined by the price of the vehicle and the amount of taxes paid on the vehicle. These are fixed by your state and are non-negotiable. Some states require first time vehicle registration to be done by the new car dealerships.
Emissions Certification Fees
There are still a few states that don’t require emissions certification, but most states require testing and certification that the vehicle meets state and federal guidelines for emissions. This is another non-negotiable fee.
This is one of those constants that were mentioned a century or so ago. These taxes are broken down into 2 or sometimes 3 categories:
- State taxes
- City taxes
- Other local sales taxes.
- Some states will also add a luxury tax to sales of new cars.
Everybody knows they have to have it. But very few people actually add this to the costs of buying a new car. How much this will be depends on a variety of factors:
- The car
- The driving record of the buyer
- Where the driver lives
- Expected yearly mileage
- The age of the driver
There are a few costs added by new car dealerships. One of these is documentation fees. This fee covers the costs of preparing all the documents for the sale of the car. This fee can sometimes be successfully contested.
This is a hidden cost added by new car dealerships to help them recoup the costs of getting the car ready to sell after delivery. This includes having the car inspected by a mechanic and then fully detailed in the body shop.This fee is one which you can actually contest, since the manufacturer typically reimburses the dealership for preparation.
Delivery is the fee added to the costs of buying a new car by the dealership to help them recoup the money they have to pay the transport company to deliver their cars. This is sometimes called destination charges. You may be able to have this fee removed from the final price.
Dealer Installed Equipment
These are options. The dealer may try and tell you that since they’re already there, you have to pay for them, but you don’t. You can tell the salesperson or manager that you want a car that doesn’t have these options installed. This is your right. That’s why they’re called options and not standard equipment.
These 8 fees mentioned here are not all inclusive. It’s important that before you start negotiating final prices, that you find out what the dealer charged fees are going to be and which ones you can successfully contest.