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3 min read Published July 14 2022

Written by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in helping readers with the ins and outs of securely taking out loans to purchase a car. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are committed to helping readers gain confidence to manage their finances with clear, well-researched information that breaks down otherwise complicated subjects into digestible pieces. The Bankrate guarantee

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You have money questions. Bankrate has answers. Our experts have been helping you manage your finances for more than four years. We strive to continuously provide our readers with the professional guidance and tools required to make it through life’s financial journey. Bankrate adheres to a strict code of conduct , so you can trust that our information is trustworthy and accurate. Our award-winning editors and reporters provide honest and trustworthy information to assist you in making the best financial choices. The content we create by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent regarding how we’re in a position to provide quality content, competitive rates and helpful tools to you by explaining how we earn our money. is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for the promotion of sponsored goods and, services, or when you click on certain hyperlinks on our website. This compensation could affect the way, location and in what order products appear in listing categories and categories, unless it is prohibited by law for our mortgage home equity, mortgage and other products for home loans. Other factors, like our own website rules and whether a product is offered in the area you reside in or is within your personal credit score can also impact how and where products appear on this website. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Once you negotiate the price of your new car, you could be shocked to find a final sales amount of hundreds perhaps even thousands, higher than you originally negotiated. The bulk of these additional costs, also known as the dealer’s fees are required by law, such as tax, title and license fees. However, there are some fees that are entirely dependent on the dealer to negotiate . Fees for dealers you can eliminate and negotiate Not every fee a dealer throws your way is non-negotiable or mandatory. Make sure you are ready to refuse any unnecessary options and bargain the charges for the products you’re looking for. The preparation fee for the dealer or vehicle Vehicle or dealer preparation fees are charges dealers add to make the car ready to be delivered. This includes washing the car, removing all “bump protectors” from the doors or getting rid of the protective covers for the seats or floor. It could cost hundreds of extra dollars, so it’s important to be aware of. How to avoid: U nless the dealer did something more beyond basic preparation, refuse to pay these dealer fees. Extended warranties and accessories installed by the dealer. These extra items are purchased at the time of purchase, but only if they are requested by you. them and determined that you’re being paid a fair price for the item or service. This could be a stolen vehicle recovery system -like LoJack — paint sealant, or an aftermarket sound system , or wheels . What to do If a seller tries in requesting payment for any of these products and you did not request them, decline to pay the fee. If you did request them, shop around to make sure that you’re paying a fair amount since you could purchase all of these items once you own the vehicle. VIN etching or vehicle identification number, is the grouping of 17 characters that identifies your car. The procedure of VIN engraving is performed to ensure security. It etchs the number on the car’s windows. It can cost between $150 and $300, which is why it is recommended to stay clear of this cost and tackle it yourself. It’s one of the most straightforward fees to avoid, so make sure to be prepared to keep it from slipping through the cracks in your paperwork . How to avoid Say no to this additional fee and reduce costs by going directly to a body shop to purchase this service. You can also find an online DIY kit at a cost of between $20 and $40 . Extended warranty An is an additional cost that can cover potential car repairs after the manufacturer’s warranty on the car expires. However, they’re not necessary for all drivers. If you’re concerned about the price of possible vehicle repairs, it may be a good idea to reconsider the you’ve chosen to purchase. And if it is worth it, do some research instead of blindly going with the dealer’s offer. How to avoid: C be sure to compare the price of this cost against the likelihood that it’ll actually be used prior to approving on it . The gap insurance guarantee, also known as asset protection or , is an additional cost you might be met with if you are leasing a car. It covers the difference between the value of the car and the loan payments if the vehicle is totaled or stolen . How to avoid: U even if you have a lengthy loan period and have no money down, this cost should be avoided. Pay at minimum 20% of your down payment to ensure it is unlikely that you become the owner of your loan. Unavoidable dealer charges There are also dealer fees which you aren’t in a position to avoid, however you can plan for them . Tax as well as title and license costs The fees for title and license cover the process that it takes to get an auto title and the license plate. The price tag attached to the tax amount will be based on your state’s sales tax rate and cannot be negotiated . Takeaway: T o learn the procedure in your state, check your state’s Department of Motor Vehicles (DMV) website. Documentation fee: The document fee is the cost for processing all paperwork involved with the purchase of a car and is the amount you be required to pay. Some states charge an annual fee for this cost, which is usually under $100. Other states have no particular requirements, so a dealer is free to charge whatever they want. The amount you pay will vary based on the state you live in and the dealer you work with. To get an idea of what’s standard, research local laws. The fee for destination covers the cost that it costs the dealer to take the vehicle out of the manufacturer. Kelley Blue Book notes that the cost can be upwards of $1700. According to Edmunds, taking your vehicle to the factory will not save you the cost of delivery as you’ll be required to pay the entire amount. The bottom line is that this fee can’t be negotiated and will be an expensive portion of your cost. The bottom line is that while some additional dealership fees are unavoidable, knowing which can be negotiated or removed entirely is crucial to making savings on the next time you buy a car. Before you step into a showroom do some investigation and calculate prior to your visit to better comprehend .


The article was written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers to navigate the details of borrowing money to purchase cars. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate from late 2021. They are passionate about helping readers gain the confidence to manage their finances with clear, well-researched facts that break down complex subjects into bite-sized pieces.

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