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What Fees Come With Buying a New Vehicle?


When you buy a new vehicle, you may look at the sticker price to determine if you can afford the purchase. While the sales price may be reasonable or even a good value, you will also have fees to think about and fit in your budget. Here is a list of fees that are commonly included in the final cost of purchasing a brand new car, SUV, truck or minivan.

Set dealership fees

The dealership where you purchase your new vehicle may charge fees. These may be handed down from the manufacturer or be dealer-specific. They are required to be listed separate from the sticker price of the vehicle, and you'll find them on the invoice for your new vehicle. Some fees you may encounter include the following:

  • Doc fee: This is a fee for preparing and filing documents related to your purchase. Some states provide a maximum on this fee. See the limits for your state here. It can range quite a lot depending on individual dealership, and it is negotiable.

  • Advertising fee: This fee may be included in the invoice and come either from the manufacturer or dealer to offset advertising costs and is another negotiable fee.

  • Delivery and destination fee: This fee is the cost to have the vehicle delivered from the manufacturer to the dealer.

  • Title and registration: The dealer will handle the requirements for establishing you as the new owner. The price is based on what the state DMV charges and is non-negotiable. Dealer markup – this fee is in addition to the manufacturer’s suggested retail price as extra profit for the dealership; it's most often seen on popular vehicles which sell out quickly and runs around 20% of the dealer invoice price.

Optional dealership fees

Many times, you will learn about other products available with your purchase of a new vehicle while you are in the finance office. These products come with fees, which will be included in the final price of the vehicle for financing unless you choose to pay for them upfront.

  • Extended warranty. This fee is optional but provides coverage after the initial manufacturer’s warranty expires, the price can vary widely with a range up to a few thousand for high-end vehicles.

  • Credit insurance: This is coverage to pay for the balance on the loan if you become disabled or die before the loan is paid. The cost depends on the loan amount and is not required by law, even though it may be required by the lender.

  • Prepaid maintenance: Some dealerships offer a prepaid maintenance plan for tire rotation and oil changes. The price depends on how long the maintenance period is set.

DMV fees

The dealer usually takes care of the cost of title transfer, but you will be required to pay the sales tax on the vehicle you purchase. This is a percentage based on the purchase price and varies by state. You may also have to pay county and city taxes, depending on where you live. Your dealer will inform you about these fees. The sales tax may be included as a deduction when you file your taxes, which will help offset the cost.

Some states require you to pay an annual personal property tax on your vehicle for as long as you own it. Like the initial sales tax, it is a percentage but of the value of the vehicle rather than the purchase price. Over time, it will be reduced as your new car depreciates.

Special fees

Some dealerships offer special deals for customers buying new cars. While these may sound appealing to you, beware that they usually come at an additional price.

  • Rustproofing: This is a treatment to protect the paint and undercarriage of the vehicle; prices range from the hundreds well into the thousands.

  • VIN etching: The VIN is etched into the glass to help prevent theft.

  • Fabric protection: This treatment is designed to help prevent spills from staining upholstery.

  • Paint sealant: A liquid wax is used to protect your paint, and you can expect to pay a few hundred.

  • Anti-theft system: A dealer-installed security system is designed to help prevent theft, but it can easily cost in the thousands.

Many times, you can find these services elsewhere for a reduced price. If you are interested in them, you can shop around ahead of time to determine if the dealer is offering a good price.

Before agreeing to a price on a vehicle, make sure you know which fees are included and if the optional ones are a good deal. Take the time to do your research between dealers to find the best deal on the vehicle you want.

The statements expressed above are only for informational purposes and should be independently verified. Please see our terms of service for more details

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