Understanding Various Car Fees

It’s foolish to see a sticker price on a vehicle and assume that’s all you’ll be spending on a new car. Everyone is aware that there are an assortment of charges (whether required or optional) that accompany a purchase, but what are you actually paying for when you’re forking over these fees.

We’ve got you covered, as you can learn more about dealership fees below. Before you head off to a dealership to purchase a new car, or before you decide to bring your new car to an auto repair shop in Cincinnati, Ohio, check out our guide below. You’ll see what fees are necessary and which may not be…

Processing Fee

You’re likely to see this fee included at every dealership, so it shouldn’t be much of a surprise when it shows up on your bill. The fee is intended to compensate for the time and effort that went into processing the various documents and paperwork, and it’s often valued at a couple hundred dollars.

Gary Foreman of USNews.com says these fees are often non-negotiable, but it never hurts to try. The dealership or seller’s reaction to your negotiation could give you some clue to their mind frame. If they refuse to lower the figure, they may be acknowledging that they gave you a deal. Reversely, if they’re willing to lower the processing fee, you may have paid a bit too much for the car.

You may be lucky enough to live in a state where this fee is limited by the law. If you don’t, you’ll want to be especially vigilant of this charge.

Preparation Fee

This charge is intended to make up for the time and financial resources that were put into the vehicle. If you’re looking at a used car, this fee could be relatively high. The car could have been a mess when it was acquired by the dealership, and you can guarantee that they don’t want that money coming out of their pocket. This is one frustrating (albeit, inevitable) detail that should be considered when you’re purchasing a used vehicle.

However, these fees aren’t as necessary if you’re purchasing a new car. Foreman says these vehicles are ready to drive the moment they arrive to the lot, and the only maintenance that needs to be done (if there’s any) is assuring that the fluids and tires are operating well. Some dealerships may be nice enough to give the car a scrub, but this is something you could do for significantly less money. If the preparation fee seems way too high, you should definitely question it with your salesperson.

Delivery Charge

As Foreman describes, the origin of the delivery fee started with Henry Ford and the Model T. The manufacturer didn’t want to be responsible for having to pay for his cars to be shipped from the assembly plants to dealerships. As time went on, this fee became very common, as the charge is often included on the window sticker and in the invoice. This has resulted in buyers accepting the cost as an inevitable part of car buying.

However, you’ll occasionally come across a delivery-fee that more than compensates for this delivery charge. If the charge seems a bit off to you, discuss it with the dealership. If the total truly makes little sense, you may be able to save some money.

Advertising Fee

As you can see, these manufacturers try to make back as much money as possible. It’s hard to blame them, especially when it comes to advertising. Brands will pay a boatload of money to have their newest model make a commercial appearance during a large telecast, and the only way they can make back this money is by charging more.

As a result, manufactures have started adding an advertising charge to each vehicle they deliver. Once again, you’ll want to assure that you’re not being overcharged in these situations. If you’re charged twice (once in the invoice and once in post-purchase fees), make sure you bring it up with the dealership or salesperson. The fee may be unavoidable, but that doesn’t mean you should be paying more than is necessary.

VIN Etching Fee

As car thefts become more prevalent, dealerships, police, and insurance companies are preaching the inclusion of your vehicle identification number (VIN) somewhere on your car. This often means paying a small fee to have your number etched into your car’s windows. In the event that your car actually is stolen, it’ll be significantly easier to identify.

The dealership will willingly etch your vin number into your car, but it often costs around $200. Remember that the number isn’t required, so you shouldn’t be forced to pay the fee if it puts you over your budget. Furthermore, you could shop around for a better price. Foreman recommends visiting a police department or local service club, where the etching is offered free or for a small price.

Fabric Protection

Some people may think this optional fee is ridiculous, but it makes some sense. People put an excessive amount of money into their cars, but they sometimes neglect to think about the interior. Often times, the material used in your cabin could be one of the toughest parts of your vehicle to replace. That’s why there’s some logic in purchasing a fabric protection plan.

Of course, you’re not purchasing a warrantee for your nice seats. If the material gets trashed, there’s little the dealership can do (besides replacing the fabric). Instead, dealerships will offer to spray down your vehicle with a stain-resistant solution, and this add-on usually costs around $200 to $250.

Depending on the car you purchase, it may not be necessary to go through with this charge. Many car fabrics don’t need the stain-resisting treatment, making the process a bit repetitive. To protect yourself, you could opt for buying a $10 can of Scotchgard (or a similar product).

Paint Protection

Similar to the fabric protection, the paint protection isn’t really necessary. Many car finishes come with their own protections, and many are designed to withstand the elements. For $250, the paint protection assures that your car is looking good as new.

If you’d rather save some money, you could opt for an annual waxing, which will essentially serve the same purpose. The risk of a scratch could be enough to tempt you to buy the plan, and if you’re feeling particularly pessimistic, this might be a good idea. However, you shouldn’t be fooled into thinking the protection plan is essential or necessary.

Necessary, Unavoidable Fees

There are some charges you won’t be able to avoid, as many of the values are predetermined. This includes the vehicle registration fee, an amount determined and charged by the state when you register a new car, assign a title and (essentially) purchase a license plate. It’s actually an advantage to purchase this from a dealership (if possible), as it means you can avoid a wait at the DMV (which everyone appreciates).

You’ll be hit with a sales tax, which usually comes in around eight-percent of the car’s price. Expect the value to be a bit higher, however, as some states often tack on small percentage points.

As you can see, these fees are an inevitable part of the car buying and car maintenance process. Most of them are unavoidable, but you could save yourself some money be including the charges in the negotiations.

If you are in the market for a tune-up or a new car, check out McCluskey Chevrolet in Cincinnati, Ohio. Their helpful staff will be happy to assist you with any of your automotive inquiries.