Car dealerships often have many different fees buried in the fine print of the sales contract. While some are necessary or unavoidable, others are more than you should pay for, like VIN etching or nitrogen-filled tires.

One of the most common dealer fees is the documentation fee, a processing or handling fee. 

Documentation Fee

Documentation fees, sometimes called administrative fees, processing fees, or service and handling charges, are the dealership’s cost of doing the paperwork to register your new car. Some states cap these fees; others do not.

It may be worth negotiating if the dealer’s doc fee is significantly higher than your state’s median. Automotive dealer Austell GA knows buyers can easily find information about the amount charged for doc fees, so a savvy consumer should ask about them early on. If the dealer cannot lower the doc fee, a reduction somewhere else in the bottom line price may help offset it.

Preparation Fee

Dealerships often charge this fee for vehicle washing, removing protective plastic from seats, and other things to make the car look nice before it’s sold. This can be negotiable.

Some dealerships will add a regional marketing fee to cover advertising. This sounds fishy, but it is a legitimate cost that some manufacturers require dealers to pay.

If a dealer charges this, you should ask them to remove it. They might look at you like you’re crazy, but if you can show them that the manufacturer already pays for this cost, they may agree to take it off. It would help if you also negotiated a higher sales price, so you don’t have to pay this extra fee. 

Flooring or Floor Plan Assistance Fee

Automotive dealers must acquire vehicles through credit, which can quickly become costly if units sit on the lot too long. Fortunately, floor plan financing companies understand this and offer several dealer-specific benefits that empower dealerships to use their inventory more efficiently.

The most apparent benefit is freeing up a dealer’s cash so they can invest in non-inventory expenses. However, a shorter-term floor plan can lower dealers’ carrying costs by reducing curtailment fees and interest charges.

In addition, some floor plan finance companies offer a daily fee floorplan that focuses on minimizing the number of days vehicles are floored and helps reduce overall dealer expenses. This is especially beneficial for dealers with short turn times who expect to sell their units rapidly.

Market Adjustment Fee

Dealerships can add this fee for various reasons, including supply and demand. It’s a way to boost sales and profit margins in the face of low or high demand for a particular vehicle. It’s negotiable but can range wildly from dealership to dealership.

There’s no reason you should be forced to pay these add-ons, and it’s your right to know what’s included in the car price before signing on the dotted line. It’s also your right to compare prices among dealers and shop around for these fees to see what other options are available. This is crucial to being an informed car buyer and protecting yourself from scams. If a dealer isn’t playing fair, you can walk away.

Delivery Fee

While some dealer fees are necessary and unavoidable, others can be negotiated or avoided altogether. Whether it’s a marketing fee for window tinting, mudflaps, paint protection, or a so-called vehicle prep fee to have the car professionally cleaned and inspected before you take delivery, these add-ons can cost hundreds of dollars.

On the other hand, a dealer’s destination fee is a legitimate line item representing the amount paid to the manufacturer for each new car shipped to the dealership lot. You should be able to negotiate this and other fees with dealers, but you can also compare prices on automakers’ websites to get an idea of what to expect. You can also ask for an “out-the-door” price for a fair deal.