How to Avoid Car-Buying Fees
Watch your step to prevent paying more than you should for a new car
Purchasing a new car is stressful enough, so it helps to go into a showroom knowing which of the charges that show up on your bill are unavoidable, which can be negotiated, and which you can skip altogether.
And remember: You have the power to walk out and shop somewhere else. That’s what CR member Ron Martinson of Falls Church, Va., says he did: “I told [the salesperson] that he got one chance to give me his final/best offer, and that there would be no ‘add-ons’ except for government charges/taxes. He lost the deal.”
Those government charges can include state sales tax (usually calculated based on the difference between the price of the new car and, if you have one, the value of your trade-in) as well as the cost of establishing the title and registration in your name. Another unavoidable fee is the destination charge, or what the automaker charges for delivering the vehicle from the factory to the dealership; it’s included in the official window sticker.
But you can often avoid other fees or negotiate them down. And check the laws in your state: Some cap the fees that dealers can charge.
Though not technically fees, dealers often try to upsell unnecessary services or features, including:
- VIN etching: A local mechanic will charge you less for this anti-theft measure, which involves etching the vehicle identification number on the car’s glass. Or buy a do-it-yourself kit for as little as $20.
- Extended warranty: A warranty that covers repairs after the manufacturer’s warranty expires can provide peace of mind. But it can add thousands to the cost of the car. CR recommends buying a reliable vehicle and setting aside an emergency fund instead.
- Disability and life insurance: Some dealers offer these and similar policies with your auto loan to help you pay for the vehicle if you are injured or die early. But you can get cheaper coverage through your primary home, car, or life insurer.
- Rustproofing, paint sealing, or fabric protection: Today’s cars are built to withstand corrosive weather and road conditions, so they don’t need additional treatments, which can add hundreds to the cost of your car. Paint sealants are basically just wax that will wear off after a few months. And the interior protection is just expensive spray-on fabric protectant.
What the Fee?!
Are you tired of the endless stream of add-on charges that appear on your bills? On the TV show “Consumer 101,” Consumer Reports’ expert explains to host Jack Rico how to avoid these pesky fees.
Editor’s Note: This article has been updated since it originally appeared in the July 2019 issue of Consumer Reports magazine.