Dealer charges

What are dealer charges?

Dealer charges are costs that the car dealer adds on when you buy a vehicle. Some dealer charges you can’t avoid; others are optional, especially if you negotiate. Dealer charges offer an added benefit for your vehicle, at a price.

Deeper definition

When you buy a car, you might also purchase accessories and extra services, such as extended warranties or other optional items from the dealership. For example, dealers might offer to etch the vehicle’s identification number, or VIN, into the window to help prevent theft. If the vehicle has a fabric interior, they might offer to treat it to help prevent stains, and they might also offer to treat the body to help the paint last longer. Rust protection is another popular dealer charge, and can cost as much as $1,200.

Some dealers also charge to prepare the car for you — for example, checking the tires and the fluids, or making sure it’s clean and pristine. Some also charge an additional delivery fee, beyond the destination fee already charged for transporting the vehicle from the manufacturer to the dealer.

Dealer charges might not be listed on your invoice, so you’ll need to compare the total price you pay at the end of the transaction to the sticker price or the price the dealer quoted you. For example, a dealer might include an extended warranty in the total purchase price, and you won’t know you’re paying it unless you scrutinize what you’re spending and ask for an explanation of everything included.

Dealer charges example

When you buy a car, you’ll pay several extra fees beyond the sticker price. These include tag, title and tax, which aren’t negotiable. However, the dealer might also want you to buy an extended warranty or purchase services designed to protect your vehicle or make it look better. Some of these services aren’t necessary, or are available for much less if you do them yourself.

Use Bankrate’s auto loan calculator to figure out how much the payments will be on your next new or used vehicle.

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