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Comprehensive Guide to Dealership Fees: What You Need to Know
Understanding Dealership Fees with MotorVero
Buying a car doesn’t have to be overwhelming. MotorVero breaks down the most common dealership fees so you can make informed decisions and avoid unnecessary charges.
Factory Invoice
The factory invoice represents the price a dealer pays the manufacturer for a vehicle. Fees listed as line items on the invoice are non-negotiable and must be paid. These include destination charges and specific taxes mandated by the manufacturer. Always double-check the invoice details, including the VIN, to ensure accuracy. Transparency is key to verifying these charges.
Administration Fees
Administration fees can sometimes appear on your sales contract. While manufacturers occasionally impose such fees due to state regulations, these charges are often dealership-specific and negotiable. If you spot them, ask the dealership for an explanation and whether they can be waived.
Floor Plan Fees
Floor plan fees are associated with the dealership's cost of financing vehicle inventory. While these charges are part of the dealership's operational costs, they should not be passed on to you. Be prepared to request their removal from your sales contract.
Destination Fees
Destination fees cover the cost of transporting a vehicle from the manufacturer to the dealership. These fees are standard across dealerships and non-negotiable. When reviewing your quote, ensure the destination fee is included to avoid surprises later.
Delivery Fee
Some dealerships may add a delivery fee on top of the destination charge. Unless you requested the car to be delivered to your home, you can negotiate to have this fee removed. Delivery fees often duplicate costs already covered under destination fees.
Vehicle Preparation Fee
This fee includes tasks like washing the car, removing protective coverings, and filling the gas tank. Typically, these services are accounted for under the destination fee, so double-check to ensure you’re not being charged twice.
Sales Tax
Sales tax is a government-mandated charge based on the vehicle’s purchase price. The rate varies by state and applies regardless of where you buy the car. Keep in mind that taxes are calculated before applying any rebates or discounts.
Registration Fee
Every car must be registered to legally drive on public roads. Dealerships often handle this process for you, saving you the hassle of visiting the DMV. This fee is mandatory and varies by state.
Documentation Fee
Documentation fees cover the administrative costs of processing your vehicle’s paperwork, such as title transfers and DMV registration. While some states cap this fee, others allow it to range significantly. If the fee seems high, ask the dealership for clarification.
Other Fees
Additional fees, often listed as acronyms, can occasionally appear on your contract. These might include marketing fees or other dealership-specific charges. Always inquire about unfamiliar fees and negotiate their removal if they seem unnecessary.
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Last Updated On Feb, 01-2025