You’ve skillfully negotiated the price of your new car, and with the help of the Edmunds article on Negotiating Car Prices, you’re confident that you’re getting a good deal. But when you see the contract, the total is much higher than what you planned on paying. Then you see the problem: The contract contains fees you didn’t know about. It leaves you wondering if these new car fees really are legitimate.
To answer that question, Edmunds has created a chart with the most common fees you may encounter when you’re buying a new car. In addition, we show how different states charge sales tax on trade-ins and rebates. If you’ve never used the chart before, it’s worth reading about the process first. But you also can quickly refer to the fees chart. 카지노사이트
What Fees Will You See?
There are three categories of typical new car fees: vehicle registration fee, sales tax and a documentation fee, or “doc fee.” Here’s an explanation of each:
Vehicle registration fee: This is the amount the state charges to register a new vehicle, assign a title (legal proof of ownership) and cover the cost of license plates. The dealer provides this service for you, saving you a trip to the Department of Motor Vehicles. Usually, the more expensive the car is, or the more it weighs, the higher the registration fee. Some states are now charging higher registration fees for vehicles that average less than a predetermined mpg. Similarly, there are a number of states that charge more for an electric vehicle’s registration. The higher costs are designed to offset the losses the state might receive from gasoline taxes since the EV would not use any fuel.
Sales tax: Sales tax on a new vehicle can take people by surprise. For example, a 9% sales tax on a $30,000 car is $2,700. Cities and counties frequently add their own tax on top of the state tax, so the amount you pay can vary within a state. We’ve listed the “maximum sales tax” rates below, but note that the sales tax on vehicles sometimes varies from the state’s usual sales tax rate. You could pay more or less than what’s shown here depending on your city, state or county. 안전한카지노사이트
Documentation fee: Dealerships charge car buyers a documentation fee, or “doc fee,” to cover the cost of preparing and filing the sales contract and other paperwork. In some states, the doc fee is limited by state law. In other states, the doc fees are unregulated. Dealerships may sell a vehicle at an attractive price but then add a high doc fee to the contract.
Review the chart below to see how your state handles doc fees. If your state does not limit doc fees, find out early in the buying process what the dealership charges. Most dealerships will not negotiate the doc fee itself, but there may be a workaround. If the doc fee is substantially higher than your state’s median, which is listed in the chart, negotiate the car’s price more aggressively to offset the fee. And keep in mind that dealers also charge sales tax on the doc fee.
The estimated median doc fees that dealers charge in each state are based on data Edmunds has collected from thousands of dealers nationwide. We’ve taken the data provided by those dealers, calculated a median fee (the middle of the range), and rounded it up or down to the nearest $5. When you go car shopping, these estimates are a valuable guide to determine if a dealership is charging close to the typical doc fee in your state.
Remember that the doc fee is just one factor affecting your shopping experience and your choice of a dealership. For example, if a salesperson is giving you especially good customer service, then a higher doc fee might be acceptable to you. And if a dealership is giving you a low purchase price, it might still result in a net savings for you even after the higher doc fee.
Is the Car Sale Taxed?
You probably expect to be assessed sales tax on the amount you pay for your new vehicle, but it might surprise you to learn that there are other tax issues that can also affect your out-the-door cost. Here is how different states handle taxes: 카지노사이트 추천
Trade-in: In many states, if you trade in your old vehicle, you can get a nice tax break. If there is a “Y” in the “Trade-in sales tax credit” column for your state, you are only taxed on the difference between the new car and your trade-in. So, if your new car costs $25,000 and you are getting $10,000 for your trade-in, you will only be taxed on the difference, or $15,000. If sales tax in your state is 10%, this will save you $1,000. If there is an “N” in the column, it means that you will pay tax on the full amount of your new car purchase and the trade-in has no bearing on the sales tax you are charged.
Rebates and incentives: Customer cash rebates and other incentives reduce the purchase price of the vehicle. But most states charge sales tax on the full purchase amount before the rebate is applied. For a $25,000 car with a $500 rebate, that reduces the sale price to $24,500. But in most cases, you’ll pay tax on the full $25,000.
In the chart below, look at the column labeled “Are incentives taxed?” If there is a “Y” in this column, it means the sales tax is based on the car’s price before rebates and incentives.
Are there other car buying fees?
Yes. Here are a few other car buying fees that frequently arise and that buyers should know about:
Uncommon dealer fees: Some dealers write additional fees into the contract and give them official-sounding names, such as “S&H,” “PDI,” “dealer prep” or even “shipping.” Find out early what extra fees you will be charged and negotiate accordingly before you sign the contract. As with doc fees, you might decide to go along with added dealer fees if you’re saving money on other aspects of the deal. When in doubt about an unknown fee or term, don’t hesitate to ask the dealer finance person.
Market adjustment. In the current vehicle shortage we’re in, you’re very likely to find an “addendum” sticker, somewhere on a new car. This is the dealership essentially saying that the vehicle in question is in short supply, and it’s raising its price to make some extra profit. This can range from $1,000 to upward of $50,000 on some highly anticipated vehicles. Note that you don’t have to pay this fee, but at the same time, the dealer doesn’t have to sell a vehicle to you at MSRP. This fee can be negotiated down in some cases, but it will differ based on the dealership. Similarly, there are a number of dealerships that do not believe in marking up a vehicle. Ask if a vehicle has been “marked up” before visiting it and be willing to expand your search if need be. For more information, read: “Should You Pay More Than MSRP for a Car?”
Dealer-installed options: on the same addendum sticker, you may also run into a list of accessories that the dealership added to make an extra profit. These aren’t necessarily a “fee” per se, but they are something to be aware of that can add thousands to the price of a vehicle. Read “Negotiating a Dealer’s New Car Add-Ons” for more information on how to handle these.
Advertising fees. Sometimes buyers look up invoice prices on Edmunds and find they don’t match the invoice price given by a dealer. What’s going on? There might be an advertising fee attached to the invoice price of the car. The advertising fee listed on a car’s invoice is an actual charge made by the manufacturer to the dealer, and you should pay it. However, some dealers will tack on an extra “unofficial” advertising fee into the sales contract, perhaps claiming they are offsetting the cost of their own advertising efforts. If you encounter this type of fee, you can challenge it or negotiate a lower purchase price on the car to offset the charge.
A final word on fees
While this chart helps estimate fees, don’t expect that it will allow you to calculate your final cost to the penny. Registry fees in particular are tricky, but DMV websites in many states have calculators to help guide you. Additionally, many states have nominal charges (less than $40) under local environmental laws. Still, this chart will tell you roughly what to expect and help you budget accordingly.
Ultimately, you’ll want to pay attention to three items when purchasing a car:
- Anything with a dollar figure and where you need to sign. Especially on the sales contract.
- The deal’s overall cost. Sometimes we get stuck on reaching a desired monthly payment, and we overlook other aspects of the deal, such as the interest rate and loan term.
- The federal truth and lending disclosure. This document should be present on every car deal. It outlines the most important parts of the loan, such as the interest rate, total payments and the finance charge.
Finally, doc fees and sales taxes can change from year to year. Edmunds updates this information regularly, but let us know if you come across any information that’s out-of-date.