9 fees to never pay a car dealership


Buying a new or used car from a dealership involves more than just negotiating the sale price. You also need to scrutinize all the extra fees being charged. Some are legitimate but others are pure dealer profit grabs or services you can easily get elsewhere at lower cost.

In this guide, we reveal 9 dubious fees commonly charged by car dealers to be aware of – and how to refuse them to maximize your savings.

1. Dealer Prep or Documentation Fees

This mandatory fee, usually $200-$500, is charged by dealers for getting the car ready for sale, including cleaning and paperwork processing. But this should really be built into the sale price rather than a separate charge.

These fees are pure profit for the dealer and can’t be refused in most states. If possible, negotiate to have the fee removed by asking for a lower sale price to offset it.

2. VIN Etching / Anti-Theft Engraving

This service laser etches the car’s VIN onto all the glass windows as a theft deterrent measure. But at $300+, it’s an expensive upsell of dubious value. Most auto thefts today are for black market parts, not the entire car.

Professional thieves know how to remove or replace etched glass. Just politely decline this huge markup. If theft deterrence is important, have the VIN etched by an independent engraving shop for less.

Vin Etching / Anti-Theft Engraving
VIN Etching / Anti-Theft Engraving

3. Nitrogen-Filled Tires

Some dealers try charging $400+ to fill tires with pure nitrogen instead of regular compressed air. They tout benefits like slower pressure loss and better fuel economy.

But studies show pure nitrogen offers no meaningful advantage over plain air for normal driving. Save your money and pass on this “upgrade” which is mostly an expensive myth. Stick with free regular air fill-ups.

4. Wheel Locks

These locking lug nuts require a special key tool to remove them, preventing wheels/tires from being easily stolen. But at $150+ from the dealer, they are hardly worth the investment.

Professional thieves can still remove them easily while they mostly just become an annoyance for legitimate owners doing tire rotations or changes. Invest in regular lug nuts instead and save the money.

Wheel Locks
Wheel Locks

5. Appearance Packages

Items like paint sealants, interior treatments, and fabric protection are hugely overpriced at dealers, often $500+ for cheap sprays. The profit margins are insane.

You can find the same products online or at auto parts stores for a fraction of the price. Carefully apply them yourself and refuse this clear money grab by the dealership’s finance department.

6. Extended Warranties

Dealers push hard on these overpriced protection plans to boost profits, charging up to $2000 extra. But the car’s factory warranty already covers most major issues for the first 3 years. After that,

coverage from an independent company like Car Shield tends to cost much less than the dealer prices. Just say no to extended warranties from the dealer – you have better options.

Extended Warranties
Extended Warranties

7. Credit Insurance / GAP Insurance

Adding credit insurance in case the car is totaled or you become disabled may bring peace of mind, but is rarely a good value from the dealer at $300-$1000. Deductibles tend to be high and the policies have limits.

Third party companies offer similar coverage at much lower cost. Let the dealer know you will get GAP and credit insurance elsewhere.

8. Rustproofing / Undercoating

This dealer-applied spray treatment allegedly prevents corrosion and rust formation on the undercarriage. But modern vehicles already have effective corrosion protection from the factory.

Aftermarket undercoating is minimally effective while being hugely marked up at the dealership, often $800+. Just wash your car regularly and inspect the underbody from time to time instead.

9. Loaded Accessory Packs

Some dealers load cars up with overpriced extras like roof racks, splash guards, illuminated door sills, luggage racks, and rear seat entertainment systems to boost profits.

But you can purchase compatible aftermarket accessories yourself for much less. Remove any expensive accessory packages from the sale – you don’t need to pay dealer markup.

Loaded Accessory Packs
Loaded Accessory Packs

10. Scrutinize the Financing Office

The finance manager’s office is where dealers often load buyers up with dubious add-ons. Be wary here.

  • They will pitch many extras here like extended warranties, GAP insurance, tire packages, fabric protection, and more.
  • Carefully review the final contract to ensure unwanted add-ons weren’t included without permission.
  • Note that the finance office gets compensated based on how much they can upsell you.
  • You have the right to turn down any protection plans or extras you don’t want.

11. Check the Fine Print

The devil is in the details with car buying. Hidden fees are easily buried.

  • Don’t let the dealer gloss over any sections of the contract, read it thoroughly.
  • Be sure to get an itemized out-the-door price sheet that lists all charges.
  • Many unwanted fees won’t be obvious unless you scan the paperwork carefully.
  • Question any charges that seem excessive or that you did not agree to.

12. Costly Cosmetic Upgrades

Some dealers load cars up with overpriced appearance extras. Avoid these.

  • This includes things like multi-coat paint protection, interior treatments, and fabric protection.
  • Third-party providers offer the same services at a fraction of the dealer prices.
  • Check the window sticker to see if any appearance packages were added.
  • Refuse all dealer-offered cosmetic upgrades and DIY instead.

13. advertising fee

The advertising fee (also called “ad fee”) is a bogus charge tacked onto the sales price by many dealerships, typically $300-$600. The dealer claims this covers their costs of advertising, but this is false. Dealers build advertising costs into the overall pricing, so this extra fee is pure profit for them.

The advertising fee provides no value to the purchaser. Savvy car shoppers will negotiate this fee out of the final price or simply reject any dealer that insists on this unnecessary upcharge. Don’t let yourself get duped by the advertising fee – refuse to pay it.

Advertising Fee
advertising fee

14. key protection fee

Key protection, sometimes called “key replacement insurance,” is an overpriced program dealers try to add to the purchase price, often $300-$400. They claim it covers replacement costs if you lose your keys or lock them in your car.

However, your own auto insurance policy and roadside assistance plans may already cover this. Even without coverage, replacing keys out-of-pocket is far less than what dealers charge for key protection. Since this fee provides virtually no value to buyers,

it should be refused. Let the dealer know you already have coverage or can pay for replacements yourself if necessary. Don’t waste money on meaningless key protection offered by the dealer – it’s just a way for them to pad their profit.

Don’t be afraid to refuse fees and services you don’t want.

  • Dealers will initially act like everything is mandatory but that isn’t true.
  • Don’t let them pressure you into anything – you have the right to decline.
  • Start practicing saying “no thank you” so you are prepared to stand firm.
  • Buyers who know their rights save the most money.

I hope these help provide some additional useful subsections for addressing dealer fees! Let me know if you need any other suggestions.

Saves money by avoiding unnecessary fees.Dealers may resist, making negotiations difficult.
Prevents dealer markup.Risk of losing dealer discounts.
Retains negotiation power.Still have to pay unavoidable fees.
Encourages better dealer practices.Limited vehicle options at unyielding dealers.
Upholds consumer rights protected by state laws.Requires preparation and knowledge of dealer fee tactics.
pros and cons

fees to be aware of when purchasing a new car

Title and registration fees – This covers the cost of processing and issuing the new title and registration in your name, which can range from $20-$150. License and plate fees – Dealerships often handle transferring or applying for new plates and driver’s licenses, which typically costs $10-$60.

Dealer financing fee – If financing through the dealer, there may be an added financing document or loan processing fee of $75-$300. Extended warranty fees – Dealers make profit on promoting extended warranties, which can cost from $1000-$3000.

GAP insurance – Guaranteed Asset Protection waiver is optional but can add $300-$900. Covers difference between car value and remaining loan balance if totaled. Theft deterrent etching – Dealers may charge $200-$400 to laser etch the VIN on windows as a theft deterrent measure. This is optional.

Pre-delivery inspection fee – Some dealers charge $100-$500 for their technicians to inspect and prepare the new car prior to delivery. Market adjustment fees – For highly sought after vehicles, dealers sometimes tack on arbitrary market adjustment fees up to $5000 extra.

Laws on Dealer Fees

Laws on dealer fees vary considerably by state, but there are some common regulations. Many states cap documentation fees between $50-500, while some prohibit them entirely. Advertising fees are restricted in some states as dealers must build advertising costs into the overall pricing.

Dealer prep fees often range from $500-$1000 but are unregulated in most states. For destination fees, dealers cannot mark up the amount set by automakers for transporting the vehicle. Certain states limit total dealer fees to a percentage of the

vehicle price, usually 3-5%, but most have no cap. Importantly, dealers must disclose all mandatory fees upfront in advertisements nationwide, and hidden fees added later are prohibited. While most states allow negotiation on dealer fees,

dealers frequently claim they are fixed. In summary, documentation and advertising fees see the most regulation, while prep fees are largely unrestricted. Consumers should research the laws in their state and negotiate fees aggressively.

car buying services

Car buying services like online retailers, buying apps, brokers, and auto programs simplify purchasing by handling negotiations and paperwork remotely. They offer convenient at-home shopping and vehicle delivery,

pre-negotiated pricing, and guaranteed savings compared to traditional dealerships. These services remove hassle and aim to get customers great deals without in-person haggling.

CarvanaOnline used car retailer, delivers vehiclesFixed no-haggle pricing
VroomEcommerce site for buying used cars onlineSet market-based pricing
TrueCarApp/site connects users to local dealers with upfront pricingGuaranteed savings off MSRP
CarMaxChain of used car dealershipsNo-haggle transparent pricing
Costco AutoPre-arranged pricing through participating dealersGuaranteed dealer cost savings
RoadsterApp-based car buying assistantCompetitive market pricing
ShiftPeer-to-peer car buying and sellingPricing set by seller
Car Buying Service

The Bottom Line

Many common fees charged by dealerships for prep work, paint protection, and “theft deterrence” provide little real value while padding profits dramatically. Take the time to understand exactly what is included in the advertised price – and be

prepared to push back on expenditures that don’t make financial sense for you. Don’t let the finance manager tack on any overpriced extras you don’t want just because it’s part of their usual routine. The more vigilant you are, the more money you’ll save.


Why should you never tell a car dealer that you’re paying in cash?

Telling a dealer you’re paying cash eliminates your leverage. They know you won’t qualify for rebates tied to financing, so you lose negotiating power. Dealers make more profit on cash buyers. Keep financing options open even if you plan to pay in cash.

How much are most dealer fees?

Typical dealer fees range from $500 to $1000. These include documentation fees, advertising fees, dealer prep charges, and more. They can add substantially to the purchase price. Research common fees in your state and be ready to negotiate them out.

Can you negotiate destination fees?

Destination fees, which cover transporting the vehicle, are fixed by the manufacturer. Unlike other dealer fees, destinations fees can’t be negotiated. Expect to pay $500-$1500 in destination charges.

Why is it a bad idea to tell a car salesman that you are not paying cash?

It’s unwise to tell a salesperson you’re not paying cash because they may try steering you only to lenders that pay them the highest kickbacks. Keep financing options open so you can secure the best loan yourself later.

How are dealers charging more than MSRP?

Dealers are tacking on market adjustment fees above MSRP due to vehicle shortages. Market adjustments of $5000+ over MSRP are common now. Research fair market value pricing and walk away from excessive markups.

What are dealer manager fees?

Dealer manager fees are extra charges added by the finance manager during paperwork, often $500-$800. They provide no value and just boost dealer profit. Refuse to pay these bogus fees.

What is the average profit margin for a dealer?

Dealers average about 5% profit on new cars. But they push add-ons to double profits. Limit fees and resist unneeded extras to keep dealer margins low.

What is the destination fee?

The destination fee pays for transporting a new vehicle from the factory to the dealership. It averages around $1000-$1500 and is non-negotiable. The destination fee is charged by the manufacturer and paid to the dealer.

Do I have to pay dealer fees in Florida?

Yes, Florida law allows car dealerships to charge processing, service and documentation fees on vehicle purchases. As of 2022, the maximum fee amount allowed by Florida statute is $1000. All dealerships in the state charge this fee.

What is the dealer documentation fee in Canada?

In Canada, the dealer documentation fee covers administrative costs of finalizing a sale, like registration paperwork and courier fees. Documentation fees average $399-$699 in most provinces, similar to the US. Quebec has banned this particular fee.

Q: What fees are commonly negotiable?
A: The sale price, trade-in value, financing rates, and most add-ons like warranties are negotiable, unlike fixed document fees.


Many excessive fees charged by dealerships can be avoided by doing thorough research beforehand and vigorously negotiating or refusing add-ons of questionable value. While certain fees like documentation charges are fixed,

customers have more control than they realize over extras like VIN etching, rustproofing, and extended warranties. Just be informed and stand firm. Avoid letting the dealership finance office turn your purchase into a feeding frenzy of unnecessary upcharges.

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