if you're going to buy a car from a dealership you need to understand that
there are a ton of sneaky fees and up sales that you have to be aware of in
order to not pay for retail for everything like I did with my first car
purchase so in this video I'm gonna cover all the fees and all the up-sales
that you can possibly encounter if you're buying a car at a dealership so
that the next time you do it you can go and more prepared and you can save all
the money that you possibly can now if you just found this channel I'm Jason
with honest finance and I make a lot of videos on different topics that will
give your life and your finances more value so if you have any interest in
this type of content feel free to subscribe but for now let's just start
talking about all these fees and up-sales the dealerships have that you
absolutely don't need to be paying for I'll start by saying that most the fees
and most the up sales that you're going to run into at the dealership they're
most likely going to happen in the financing office so we're just going to
assume that you're inside the financing office and this is where everything's
going to be happening but just keep in mind that they can happen elsewhere just
usually they're gonna end up in the financing office so once you negotiate
the price of the car with the salesman you're gonna eventually end up in the
financing office and even if you're not financing your car you still have to go
in there because this is where the final paperwork is going to be signed and this
is where the final out the door price is going to be showed to you and that's
where you can find all of these dirty fees and that's where you have to be
really careful so that they don't make a ton of money on you just because you
have your guard down because you thought the process was over eventually you're
gonna have to sign the final bill of sale and this is going to have
everything listed out it's gonna have the price of the car the taxes all the
fees associated with the vehicle and so this is where you have to learn how to
pay attention to what's on that sheet of paper so that you don't get ripped off
and as far as negotiating these fees go I know that you guys want to get rid of
them as soon as you can but the thing is is you have to wait until the bill of
sale is actually printed out that way you can see exactly what's on the paper
or not because you don't want to be negotiating for something that doesn't
even exist until they print off that sheet of paper and that's exactly when
you're gonna negotiate don't do it earlier than that just do it when it's
printed out the salesman that you bought the car from doesn't have any control
over the stuff that's going on in the financing department so remember you're
just negotiating the car with the salesman and
everything else is gonna happen with the Finance Manager now there are a lot of
necessary fees that you have to pay no matter what and I'm going to be talking
about those first because I want you to understand that there are required fees
when you buy a car but we're gonna talk about those and then we'll talk about
the fees that aren't required the ones that are just a total waste of money the
required fees that you're going to have to pay at the dealership are called your
TTL which stands for tax title and licensing and you're always gonna have
to pay this based on the state that you're in and everybody has to pay it
you can't get out of these fees so if you've got taxes registration licensing
inspection or anything like that then just be aware that these fees are
expected and there's nothing you can do about it I know it sucks but you are
gonna have to pay those fees now let's talk about the fees that are really bad
and these are the fees that nobody talks about that'll just show up on your
paperwork out of nowhere and these are the fees that everybody seems to pay
because nobody's paying any attention to the line items on the bill of sale so
pay attention here because these are the big ones that you can get in trouble
with the first fee I want to talk about is extremely common and you're always
gonna see this on your paperwork and it's called the doc fee or the
documentation fee and then some people also call it the processing fee so if
you see either of these just keep in mind that that's fairly normal to be on
your paperwork they're gonna range from about three to five hundred bucks but
the thing is is I just don't like this fee because you can get out of it I
completely understand that there's always gonna be associated costs with
paperwork and filing and everything like that but why pay for something if you
don't have to every single dealer that I've ever gone to has never been able to
waive the doc fee because they're required to charge it to everyone and so
the only way that I've ever wiggled around it is to compensate in a
different area so what I mean by this is if I have a trade-in I'll either ask
them politely if they can raise it 300 bucks on the trade or I'll just have
them take $300 off the car to compensate for the doc fee that way they can still
charge me the $300 doc fee but then I get $300 back somewhere else and then it
compensates so that I don't have to pay it and just remember that you're not
obligated to buy the car at all so if you're frustrated by paying an extra 300
bucks on the doc fee and they're not gonna waive it for you then just leave
because you're not obligated to buy that call
and you can always buy one from someone else the next fee that I've seen on the
paperwork is called a delivery fee and if you do see this on your bill of sale
get out of this fee a hundred percent because you do not need to be paying it
because first of all this only applies to new cars so if you're out there on
the lot and you're looking at the window sticker which is called the Monroney
sticker that sticker actually has a destination charge already built into it
and that's a flat fee that everybody has to pay across the entire country that
way that it's always fair so with a new car the destination fee is already
required therefore if you see the delivery fee later down the road on your
bill of sale then that is just a complete waste of money and what they're
doing is they're double dipping because you've already paid that fee so the
bottom line here is that if you see a delivery fee on your bill of sale do not
pay that fee because the only fee that's required is on new cars and that's on
the window sticker it's called the destination fee and that's already built
into the price of the car that is the only destination fee that you're ever
gonna pay and that's only on new cars now the next fee that I want to talk
about that I've always seen is called VT R and that stands for vehicle theft
registration and it's typically about 300 bucks and I've always got this fee
waived because it's absolutely not necessary so if you see anything that
has to do a theft protection just have it waived because like I said earlier
the only fees that you're required to pay are the ones by the state the next
fee I want to talk about is one that I hate seeing on the paperwork and this is
called an advertising fee the reason that I don't like this is because it
makes you feel somehow like you're supposed to help them pay to advertise
their cars when in reality they're gonna be paying that and that's just the cost
of doing business because honestly they can pay for advertising however they
want to I just don't want to have to pay some stupid advertising fee on my car
purchase that they're justifying pays for their ads when in reality they have
a budget for their ads and they can pay for it themselves now next on my list of
fees is a really good one because they make you feel like you're supposed to
pay for things like detailing and gas and this is called the dealer prep fee
and this is just a total waste of money because they're always gonna prep your
car and they're always going to fill it with gas but you don't need to be paying
for those services because it the end of the day there's a lot of
competition in the car business so if they really want to have your business
then they don't need to be charging you a dealer prep fee when nobody else does
because there's no point in paying for something if you don't have to the last
fee that I want to talk about is usually only found on cars that are in high
demand and it's called a DM which stands for additional dealer markup and this is
just a total waste of money because it means that you're paying over MSRP so
the dealer can just make extra because of the high demand of the car that you
want to be buying and you absolutely don't need to be paying this fee because
there's plenty of other dealers out there that you can get that car from
that are not gonna charge that fee don't be tempted to give in to this fee just
because you finally found the car that you want and they're really hot on the
market because honestly if you just work with a bunch of different dealers you're
gonna find the same car that you want the high demand version and then you can
get it without the ADM which is gonna save you a lot of money so either get
the a DM waived off of your car purchase or just go to another dealer that's not
gonna charge it because like I said earlier you don't have to buy the car
right now you can always walk out and you can buy it from someone else now
before I talk about the fees that can be negotiated I first want to talk about a
hidden fee that's never going to be disclosed and you're not gonna know
about it if you're financing your car through the
dealer this is called the finance reserve and this is really bad for you
the consumer if you're not paying attention and you're financing your car
through the dealer because if they have a finance reserve what this means is
that you can actually get a rate through the dealer that's let's say 5% but in
reality it was only 3% and they're taking a 2% cut which is the finance
reserve and they're making all that money off of you just because you didn't
get the best rate that you could having done some prior homework so because
you're never gonna know what their financed reserve is my best advice to
you is to do your homework prior to getting financing through the dealer so
what you're gonna do is you're just gonna go online you're gonna check your
local credit unions and you're gonna find the best rates that you can for the
car that you're gonna qualify for that way when you go into the dealer you know
exactly what your rate should be and then they can't throw any curveballs
with a finance reserve because you already know what the rate is supposed
to be or an even better option would be just to get pre-approved from your
credit union before you go to the dealership that way all of your
financing is already in order and you never have to worry about a stupid
finance reserve because you did it through someone other than the
dealership and I want to make a quick note here that if you're gonna be buying
a new car and you're going to finance it directly through the manufacturer like
through Ford financing or Toyota financing that's fine because I've seen
really good rates through them but just make sure that you read the contract
terms because a lot of the time you can't refinance your car for six months
or a year and that's really weird because a lot of lenders don't do stuff
like that so just make sure that you read through the contract and make sure
that you're getting a really good value because they do exist but I have seen
some pretty bad ones out there too now if you've made it this far into the
video can you please just give it a big thumbs up that way I can tell if you
guys are actually liking this content or you're not so thank you very much okay
so now I'm going to talk about all of the upsells that can happen at the
dealership and I don't really think that a lot of these are a very good value but
if you do your research and you find them to be a pretty good price for what
you're getting then I would definitely go ahead and just do them through the
dealership because you might as well if they're good value the first ones that I
want to talk about are things like window tinting pinstripe stickers and
then clear bra installation and all of these things are totally fine to do if
you want to add them to your car just make sure that you're not paying full
retail for them because that's what a lot of dealers will do they'll just
charge you way too much money for something that shouldn't be costing you
that much money so all you need to do here is just some quick research because
if you find something on your car that you want to add then just make some
quick phone calls or check online that way you can tell if it's a good value or
if it's a bad value from the dealership so for instance if you wanted to have a
clear bra put on your car and the dealership was charging you $300 to have
that done then what I would do is I would call someone who specializes in
clear bra installation and see what they charged and that way I could tell if I
needed to have the dealership price match or if I just needed to go through
that third party to have that done because that's gonna be the best value
for me as long as I'm getting the best price I've had a lot of upgrades
installed at the dealer like window tinting leveling kits and even leather
seats but I always make sure that it's going to be the best value through the
dealer before I ever say to any of that kind of stuff dealerships
will also try to upsell you on things like nitrogen filled tires VIN etching
and then even locking lug nuts so that your car can't get stolen but I've never
bought any of these kind of things because I've just never felt that they
were good enough value for what you're paying also watch out for what's called
credit life insurance which means that if you die you'll have your car paid off
which might sound good on the outside but it's a total ripoff I say this
because if you really wanted to have your car paid off if you died then I
would just stick with regular term life insurance because it's gonna be a lot
cheaper and it's gonna be a better value overall and then lastly if the dealer
offers anything like carpet protection paint protection or even an extended
warranty just know that if you are buying these types of services you don't
have to pay full price for them so let's say that the dealer wanted 1,800 bucks
for an extended warranty well what I would do is I would just ask what's the
best price he could do to get the Commission and if he came back at like
950 dollars then maybe I would consider doing the extended warranty but I'm
never gonna pay for retail for it just please remember to negotiate and do
your research before you buy any of this stuff because if you're not doing that
you're gonna end up spending way too much money on a bunch of stuff that you
probably don't need in the first place and most of the time you can even
finance this stuff directly on top of the loan so not only can you get totally
ripped off from the dealer if you're paying too much for those products but
then on top of that you can also pay interest on them which is something that
you for sure do not want to be doing just because your payment only goes up
25 bucks a month on your car because you added a bunch of stuff to it doesn't
mean that it was a good value in the first place so just be aware I don't
want you financing a bunch of overpriced junk just because you can so hopefully
the next time you buy a car at a dealer you'll be aware of all the different
hidden fees and the up-sales that they have that can be a total ripoff so that
you can save more money in your wallet the next time you buy a car now once
again I'm Jason with honest finance and I make a lot of videos on different
topics that will give your life and your finances more value so if you guys are
interested in that type of content feel free to subscribe but for now I will
just leave some more car buying videos over here that you could watch but I
thank you for your time have a good day