if you're going to buy a car from a dealership there's always going to be mandatory fees that
everybody has to pay but then there's also going to be sprinkled in some other fees that you don't
have to pay and so in this video i'm going to easily show you how to tell the difference between
the fees that you do have to pay and the ones that you don't and then i'm going to elaborate
a little bit more on them so you understand them a little more so basically the way that it generally
works at dealerships is as soon as you find a car that you want to buy and you somewhat
negotiate the price with the salesman eventually you're going to end up in the financing office and
that's where everything happens in a final state meaning they're going to print out the paperwork
you're going to be able to look over all of it and then you sign and you drive away after that point
so what we're going to talk about right here is as soon as they print the first round of paperwork
and you're actually looking at the different fees that are associated with your car this is where
it's important to pay attention because they can make more money off of you if you're just thinking
that everything's done and over with at that point so if you were looking at the sheet and you knew
that you had negotiated the price of your car down to twenty thousand dollars then if you see twenty
thousand dollars on there that's fine because you've already negotiated that price but below
that you're going to see other fees which they're going to call ttl which stands for tax title and
licensing so depending on the state that you live in you are going to have those mandatory fees
associated with the 20 000 that you're already paying for the car so for instance if you have
sales tax insurance registration admissions anything like that that your state requires those
fees are going to be listed there and you are going to have to pay those on top of the 20 000
that you already negotiated now the easiest way to know if it's a mandatory fee or not is if the fee
has sales tax or not now obviously if you live in a state that doesn't collect sales tax then
this isn't going to work you're just going to have to look up what actually is mandatory in that case
but if you see a fee that has sales tax associated with it then that is a fee that you probably don't
have to pay versus a tax that's something that you're already being taxed on so you're not going
to have to pay sales tax on top of a tax so for instance tax title and licensing you already know
that those are attacks and so you're not going to have to pay sales tax on top of those and that's
an easy way to tell if you have a mandatory fee or not so now that you understand a little
bit more about the mandatory fees and the other fees here's a few of the other fees that you're
probably going to run into on your paperwork before you've even negotiated any of them in a
lot of states you're going to see a fee called the doc fee or also known as the processing fee and
if you do see this on the paperwork a lot of the time you can't wiggle out of it and it's usually
about three to five hundred bucks but i've found the way that i personally negotiate is by taking
it off of somewhere else so for instance if you wanted to take it off the final price of the car
then do that and compensate for the fee so if it was 500 take 500 bucks off the purchase of the car
that way the fee in a sense is waived even though they're not waving it on the paperwork another fee
that you want to watch out for when you're looking over the paperwork is called the delivery fee
because this makes it feel like you have to pay a part in getting the car to the dealership because
when you are buying a new car there is what's called a destination charge but that's built
into the price of the vehicle and you can't get out of that but if you're buying a new car or
used car and you see on the paperwork that there is a delivery fee you don't need to be paying this
get out of it and don't pay that fee also if you see any fees listed that have to do with vehicle
theft you don't need to be paying any of these fees either one of the big ones is called vtr it
stands for vehicle theft registration and i've seen it a lot of the time for about 500 bucks
and this is something that you do not have to pay so if you see anything to do with theft theft
registration anything like that tell them you do not want to pay those fees either i've also seen
an advertising fee and a dealer prep fee so if they do fill your car up with gas you don't need
to be paying for that that's just a service that a lot of dealerships offer you when you buy a car
from them so if you do see the advertising fee or the dealer prep fee get out of those as well
and if you are going to finance your car through the dealership that's fine if you want to do that
but just make sure that the rate you're getting is competitive with the best rates on the market
because if it's not then that would imply that they're getting what's called a finance reserve
which means they're actually keeping a portion of the interest rate that you're getting so for
instance if the best rate on the market was three percent but they gave you a five percent rate then
they could potentially be pocketing two percent of that interest rate because you're financing
with them so just make sure you're getting the most competitive rate through the dealership
and that way it is convenient but you also want to make sure that you're getting the best rate and if
your credit's not very good then you're probably not going to qualify for the best rates out there
and so you're really not going to know if the dealership is going to be the most competitive
so what i would recommend doing is actually getting pre-qualified from your local credit
unions because they typically have the best rates and then you can either go with the credit union
or you could just have the dealership match that rate or beat it and in that case you would
be getting the best rate possible even if your credit score wasn't that good so just be aware
that when you're in the financing office and they print the paperwork out for you
before you sign anything look over everything and check the line items and make sure everything's
correct because this really could save you about a thousand dollars or more just by paying attention
to fees that you don't necessarily need to be paying versus the fees that you do need to be
paying so pay attention and it can probably help you out the next time you're buying a car