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The Hidden Costs of Car Buying
Lookout for these sneaky car buying costs

Buying a car, whether new or used, is an exciting yet expensive time. In addition to the sticker price, you have to budget for hidden costs associated with securing your new ride. From dealership fees and taxes to insurance premiums, the hidden costs of buying a car can break your budget if you don’t plan ahead or know what fees to decline.

Fees to ponder

The price to get your vehicle on the dealership lot, which is displayed on the window sticker as a “destination charge,” is a non-negotiable fee, according to You should, however, beware of “pre-delivery inspection,” “dealer prep,” and any extra “delivery” or “destination” costs listed on the sticker, as these are suspect charges.

“Look at the sales contract carefully to make sure you are not paying twice for the same thing,” advises U.S. News & World Report writer Evelyn Kanter. “Destination or delivery, but not both.”

In order to comply with the law and avoid pricey tickets, you must pay the required fees to title and register your vehicle. You can avoid these fees if you plan to transfer your already paid-for plates, explains Sales tax, although different by state, unfortunately cannot be avoided.

The notoriously unregulated fee, referred to as “conveyance fee” or “doc fee,” which can range from $150 to $300, is a required fee, but that doesn’t mean you technically have to pay it.

“Try to get the dealer to reduce the price of the car by a similar amount, and let the fee stay on the purchase agreement. As a fallback negotiating tactic, ask that some accessory, such as floor mats, wheel locks, or a cargo organizer, be thrown in free of charge,” suggests

You might be asked if you would like to invest in an extended warranty, which is designed to pick up coverage after the warranty from the automaker expires. Whether or not you buy it is up to you.

“If you do buy [an extended warranty], we recommend getting coverage backed by the vehicle manufacturer or an established third-party company,” states “You don’t have to buy on the spot; take your time to compare contracts.”

Fees to refuse

Just because the dealership’s shiny ad or splashy commercial got your attention doesn’t mean you have to pay for it, reports Kanter; ad buy fees should not be your responsibility.

Your car is already engineered with rust safeguards from the manufacturer, adds Kanter, who warns against paying for additional “rust, paint and fabric protection.”

Fees for anti-theft systems, VIN etching, and pinstriping are things to consider, but if you’re interested in them, you can likely find a cheaper price outside the dealership, according to

Insurances such as credit life and disability are worthy investments, just not from a dealership. explains that term life insurance can be a less expensive substitute for credit line insurance, and disability insurance might already be rolled into your employer benefits. In either case, a little outside research will save you some money.

The price of car ownership is already high; don’t make it astronomical by getting swindled by hidden costs and dealership fees.


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Published by Lenco Credit Union
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Disclaimer - All content contained in this newsletter is for informational purposes only and should not be relied upon to make any financial, accounting, tax, legal or other related decisions. Each person must consider his or her objectives, risk tolerances and level of comfort when making financial decisions and should consult a competent professional advisor prior to making any such decisions. Any opinions expressed through the content in this newsletter are the opinions of the particular author only.  

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