"FAQ Friday: What Fees Do I Need To Pay, and Which Can I Avoid?" Edmunds Daily

FAQ Friday: What Fees Do I Need To Pay, and Which Can I Avoid?

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Good question!

There are plenty of fees associated with buying a new or used car -- enough to make you think you should have bought a less expensive vehicle. Which of these fees are mandatory and which can you haggle over? Let's break it down:

Vehicle Registration fee: This one's a no-brainer. Every vehicle must be registered by the state. It covers registration, license plate fees, and title assignment.

Sales Tax: Same as it ever was. At 8%, tax on a $20K car can cost $1,600!

Documentation fee: If the doc fee is regulated in your state, pay it. But in most states it's not, and the dealer could really overcharge you. Try to keep your doc fee at or below $100.

Dealer fee: Often labeled 'dealer prep' or 'shipping' or any of a number of made-up names, this is where you need to be careful.

Advertising fee: If it's listed in the car's invoice, pay it. If not, but the dealer tries to write it into your contract, fight it.

Taxes on Trade-Ins and Rebates: This is a complicated subject and, as usual, it depends on your state law. But a state-by-state breakdown of these taxes, along with more details on all the fees listed above, is in our article, What Fees Should You Pay? Here, as with the price you pay for the metal you'll be driving home, it really pays to do your homework before going to the dealer.