Don’t Fall for Hidden Fees: How to Save Money on Your New Car

MoneyThe intoxicating aroma of new-car smell can temporarily take the edge off one’s senses—but when it comes to haggling at a dealership, you want your wits about you.

One inevitable factor in new-car purchases is hidden fees. Some of these fees you can avoid, some fees you can’t, so it pays to know the difference and to be educated when you go toe-to-toe with a dealership salesman.

The sales gurus are going to play hardball and try to squeeze as much money as possible out of this deal, so make sure you bring your A-game and squeeze back with all your might.

No Means No

The old adage “question everything” comes in handy when you’re negotiating the price of a new car.

When you’re presented with the “final” price of the vehicle you want, go over that invoice with a fine-toothed comb. If a fee they’re charging seems squirrely to you, question it. Even on fees you know to be legit, examine each line item—you may find wiggle room even within valid costs.

For instance, the “destination charge” tacked onto a car purchase is an accepted fee, but keep your eyes peeled—if a dealer is trying to charge you a destination fee as well as a delivery charge, that’s the time to call “bull.” Tell them in no uncertain terms that you aren’t paying a delivery charge on top of the destination fee. One is legit—the other is extraneous.

Other fees you can justifiably balk at include:

  • Advertising charge
  • Dealer prep
  • Floor plan fees (a.k.a. the cost of keeping a vehicle on the lot)

Deal or No Deal

Some fees that are essentially legit but you may be able to dicker down include:

  • Administrative fees: These can go either way, so examine these fees line by line and question the ones that seem erroneous.
  • Documentation fees: These are legitimate—fees for processing new-car paperwork—but there may be contestable line items among this lot, too, so read through them, and also study up on your state’s requirements—whether a statewide flat fee is mandated or whether the dealer has carte blanche to charge what he wants.
  • Finance charges: There isn’t wiggle room here, per se, but you can—and should—shop for financing outside the dealership before you go in, so you have options to fall back on if the dealer’s financing offer isn’t an ideal deal.

Final Words of Advice

It can be wise to do your initial negotiating over the phone and get the worst out of the way before you enter final face-to-face negotiations. A salesman can’t coerce you into signing anything when you’re not there in person, and it can be easier to keep your head when you’re sitting in the comfort of your own home.

Remember foremost that you hold the power in this bartering process. If you aren’t happy with what you’re being offered, you should walk away. Sometimes, sensing a buyer is going to flee will loosen up a salesman’s tactics—after all, he’d rather lose a few bucks on the sale than lose the sale altogether. If not, there are plenty of fishing holes replete with new cars for you to cast your net into.

If you’ve found a car that you absolutely can’t live without, just remember that tomorrow is another day. A salesman who wasn’t willing to deal at the start of the week, when the pickings were promising, may change his tune come Friday when his sales week is about to expire.

January 28, 2016 by launchadmin