jcarbone85
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- 08/26/23
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One of the greatest joys in life is getting behind the wheel of a brand-new car and driving it off the dealer's lot for the first time. But those feelings of elation don't come cheap, and often dealers will attempt to tack on various fees for your purchase that are not necessary. That being said, it's important to know what fees you are legitimately responsible for paying when you purchase a new automobile, and the purpose of this article is to educate you on five extraneous fees in particular that dealers will often attempt to trick their customers into paying, and how to avoid them.
First is what is known as the dealer preparation fee, which is something that dealers often attempt to use to pad the final price of the car you're buying. It's essentially just an attempt to get the customer to pay for something the dealer has already done as a part of the regular sales process, usually at a great markup. If you notice any odded fees on your bill of sale that are not government-mandated or clearly explained, it is important to always question them.
The next fee concerns something known as VIN etching, which is a countermeasure to motor vehicle theft that involves etching a vehicle's Vehicle Identification Number onto its windows to reduce the value of a stolen vehicle to thieves. Dealers will often do this beforehand – usually without even asking – and then attempt to overcharge you for this unwanted service that cannot be undone. In these instances, you should attempt to negotiate to either lower the fee or waive it all together.
The third extraneous fee that customers are often hit with is known as “yo-yo financing,” which is when a dealer tells someone that they had been approved for a car loan – normally at a low rate – without having actually completed the paperwork. Later, when the customer has the car at home, they are suddenly informed by the dealer that the loan fell through and that they will have to renegotiate the terms...and those terms are normally not in the customer's favor. To avoid falling into this trap, the solution is simple: always have a pre-approved loan from an external lender before going to the dealership.
Up fourth are extended warranties and prepaid maintenance plans, many of which don't really offer much more than the standard warranty that your car would come with. Always be sure to read the fine print on such offers, and if you do need some peace of mind, consider buying a third-party warranty, which are typically much more affordably priced. As for prepaid maintenance plans, they tend to be overpriced for what they provide and you would do better by having your oil changes and other minor repair work done by your local mechanic.
And finally, we come to what is known as the “trade-in trap,” which is when a dealership will attempt to greatly undervalue the trade-in vehicle that you are offering in exchange for your new car; in order to “make up for it,” the dealer will increase the price of the vehicle that you're interested in. To avoid this, it is recommended that you sell your current car on your own and put the proceeds towards the purchase of your new one.
Buying a car can be a complex and stressful process, but if you do your homework and pay attention to the small details, you can ensure your chances of coming out on top and having a brand-new car that will serve you well for years to come.
First is what is known as the dealer preparation fee, which is something that dealers often attempt to use to pad the final price of the car you're buying. It's essentially just an attempt to get the customer to pay for something the dealer has already done as a part of the regular sales process, usually at a great markup. If you notice any odded fees on your bill of sale that are not government-mandated or clearly explained, it is important to always question them.
The next fee concerns something known as VIN etching, which is a countermeasure to motor vehicle theft that involves etching a vehicle's Vehicle Identification Number onto its windows to reduce the value of a stolen vehicle to thieves. Dealers will often do this beforehand – usually without even asking – and then attempt to overcharge you for this unwanted service that cannot be undone. In these instances, you should attempt to negotiate to either lower the fee or waive it all together.
The third extraneous fee that customers are often hit with is known as “yo-yo financing,” which is when a dealer tells someone that they had been approved for a car loan – normally at a low rate – without having actually completed the paperwork. Later, when the customer has the car at home, they are suddenly informed by the dealer that the loan fell through and that they will have to renegotiate the terms...and those terms are normally not in the customer's favor. To avoid falling into this trap, the solution is simple: always have a pre-approved loan from an external lender before going to the dealership.
Up fourth are extended warranties and prepaid maintenance plans, many of which don't really offer much more than the standard warranty that your car would come with. Always be sure to read the fine print on such offers, and if you do need some peace of mind, consider buying a third-party warranty, which are typically much more affordably priced. As for prepaid maintenance plans, they tend to be overpriced for what they provide and you would do better by having your oil changes and other minor repair work done by your local mechanic.
And finally, we come to what is known as the “trade-in trap,” which is when a dealership will attempt to greatly undervalue the trade-in vehicle that you are offering in exchange for your new car; in order to “make up for it,” the dealer will increase the price of the vehicle that you're interested in. To avoid this, it is recommended that you sell your current car on your own and put the proceeds towards the purchase of your new one.
Buying a car can be a complex and stressful process, but if you do your homework and pay attention to the small details, you can ensure your chances of coming out on top and having a brand-new car that will serve you well for years to come.
