Don't pay unnecessary dealer fees

Documentation fees, which cover the costs of processing all the paperwork associated with a new car purchase, are something new car buyers need to pay. But look at this line item carefully and consider negotiating these dealer fees if it is significant. Some states charge a flat fee for this item that is typically well under $100. Other states have no specific requirements, so a dealer can charge whatever it wants. To learn the process in your state, visit your state's Department of Motor Vehicles website. A complete list of DMV sites by state can be found at Dmvlist.com.

Dealer-installed accessories and extended warranties are extra items that you should pay for at the time of your sale, but only if you requested them and if you've determined that you are being charged a fair price for the item or service. These items might include a stolen vehicle recovery system like LoJack, paint sealant, an extended warranty, or aftermarket wheels or sound system. If a dealer tries to charge you for any of these items and you did not request them, refuse to pay the associated dealer fee. If you did request them, shop around to ensure that you are getting a fair price because you can obtain any of these items elsewhere after you own the car.

Floor plan fees are the charges the dealer incurs to keep the car in his or her inventory. Similar fees are incurred in many retail stores, when the manufacturer ships that store inventory to stock its shelves. Just like with vehicle prep fees, you don't pay extra when you buy a shirt from a retail store just because they had the color you wanted on the shelf. There's no reason you should pay this dealer fee on your new car purchase.

Administrative fees can sometimes be a generic line item that allows the dealer to make a few extra dollars. Other times it can be a legitimate cost from the manufacturer. Ask to see the factory invoice for the car you are buying. Make sure the VIN, or vehicle identification number, on the invoice matches the VIN on your sale paperwork and see if it's listed there as a line item. If yes, then it's a fee the manufacturer is charging the dealer and a legitimate cost.

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