Making Ends Meet: How to negotiate or avoid dealer fees when shopping for a new car

Prices at the pump just jumped up again, groceries are more expensive, your insurance premiums are skyrocketing – the list of bills getting pricier goes on and on. And if you need a new car, yes, that’s more expensive too – especially when dealer fees are tacked on to that final price. But Consumer Reports says certain fees can be negotiated or avoided altogether.

Jon Linkov, Consumer Reports’ Deputy Auto Editor, says some dealers charge more in fees than others. It can happen with the document fee that’s often charged to process the title and registration in your name.

“So, one dealer can charge you $399. Another dealer with the same vehicle can charge you $699. You could always negotiate and say another dealer is charging me less,” Linkov said.

Then there’s the destination fee -- the cost to deliver your car to the dealership and get it ready for you to drive home -- which should include a tank of gas or full electric charge.

But Linkov says some dealers could try to charge you twice for it.

“You may see something called vehicle prep or delivery prep tacked onto your car charge. Never pay that. The dealer here is just trying to double charge you, get extra money to do the exact work that they’re supposed to do in the destination charge,” said Linkov.

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He says these days, don’t be surprised to see a new fee called a “market adjustment.” The reason? Linkov says the dealer is taking advantage of low inventory or the popularity of a specific model. He says you can ask the dealer to remove it -- but many won’t because of the law of supply and demand. Linkov recommends you think long and hard before paying it.

“You’re never going to get that money back when you go to trade the car in or sell it,” Linkov warned.

And when it comes to VIN etching, he says you don’t need it because the number is already in several places on newer cars.

As for extended warranties, Linkov says most new cars already come with decent factory-backed protection, so you probably don’t need it. However, be sure to read the terms and conditions so you know.

Linkov says other add-ons that are unnecessary include:

  • Nitrogen-filled tires
  • Rustproofing
  • Paint sealing
  • Fabric protection