Which Fees Can You Negotiate at the Car Dealership?

Some add-on fees are required by law, but others are up to the individual car dealership and are thus fair game for negotiation. We’ll walk you through which fees you can negotiate with the dealer and which ones you’ll be stuck with.

Save Some Money on That Next Vehicle

First-time car buyers often get unpleasant surprises when they see final sales numbers. They negotiate a fair price at the car dealership, but the final cost is higher by hundreds or even thousands of dollars. The reason for this discrepancy is dealer fees.

Not All Dealer Fees Are Negotiable

Before discussing the fees drivers can negotiate at the car dealership, let’s look at the ones required by law. These fees vary by state and aren’t up to the dealer.

The most unavoidable fee is sales tax. Every US state charges sales tax, and the rate varies depending on a buyer’s state of residence. While sales tax can’t be negotiated, some states allow buyers to deduct trade-ins from their purchase prices, which can reduce their tax liabilities.

In states that require dealerships to conduct inspections and emission testing before selling a vehicle, drivers can also expect a flat-rate inspection fee. However, some states allow buyers to manage the process independently by hiring outside mechanics to complete the inspections.

Destination fees cover the costs of transporting the car to the car dealership from the factory. They can run into the thousands for new vehicles purchased from the factory. Keep an eye out for added delivery and preparation fees, as they should already be included.

Understanding Tax, Title, and License Fees

Buyers must register their cars with the local government. Dealerships often handle this process on behalf of their customers, although buyers typically have the option to do it themselves.

There’s no avoiding tax, title, and license fees (TT&Ls). The rules vary by state, but every state imposes them, and some apply additional, non-negotiable fees.

Keep in mind that car dealers sometimes charge extra fees to handle paperwork. These may be negotiable, although each state also sets separate standards for what dealers can charge. This fee may be covered under the TT&L or the dealership’s documentation fee.

So What Can Drivers Negotiate at the Car Dealership?

While there’s no sense in wasting time and energy trying to get a dealership to come down on fees set in stone by the state, buyers still have some wiggle room. Most dealerships offer optional services that drivers can avoid and may impose fees they can negotiate.

Buyers should be on the lookout for market adjustments. The dealership adds these fees when the demand for a particular car is high. They’re not regulated and are negotiable.

Dealers often offer additional protection in the form of insurance or added warranties. Drivers can easily avoid them by simply declining the service, or they can negotiate. Examples include GAP insurance, loan protection insurance, extended warranties, and tire-and-wheel protection.

Additional fees for services like appearance protection, VIN etching, and anti-theft devices are sometimes added automatically and sometimes considered upgrades. When in doubt, ask the car dealership for clarification before signing on the bottom line.