The purchase agreement is where deals go sideways. A car you negotiated to a fair price can end up costing $1,500–$3,000 more once the paperwork hits. Here is every fee you will encounter and exactly what to do with each one.
Fees you are required to pay
These are set by law or the manufacturer and cannot be negotiated.
- Sales tax — State and local tax on the purchase price. In NJ, the rate is 6.625%.
- Title fee — Paid to the DMV to transfer the title. Typically $50–$100.
- Registration fee — Registers the vehicle in your name. Varies by state.
- Destination fee — Covers shipping from the factory. Set by the manufacturer — identical at every dealer.
The documentation fee
The doc fee covers the dealer's cost of processing paperwork. In New Jersey, it is capped at $549.50 by state law. Some states have no cap and doc fees can reach $800–$1,000. Always clarify whether the doc fee is included in the quoted out-the-door price before you agree to anything.
Fees that are negotiable
- Dealer prep fee — Supposedly covers cleaning and inspecting the car. Usually pure profit. Ask them to itemize it or negotiate it off.
- Advertising fee — Dealers passing their marketing costs to you. Not your bill. Decline or negotiate down.
- VIN etching — Security etching runs $200–$400 at a dealer. A DIY kit costs $25. Decline or negotiate way down.
Fees you should refuse entirely
- Market adjustment / dealer markup — A surcharge above MSRP. 100% dealer profit. Walk if inventory is available elsewhere.
- Nitrogen tire fill — Marginal benefit over regular air. Decline.
- Paint/fabric protection — A wax coat or Scotchgard spray you can buy for $12. Decline.
- Lo-Jack / GPS tracking — Often installed without asking. Negotiate the cost completely off the purchase price.
The rule
Always get the out-the-door price in writing before you enter the finance office. Every fee should be on that sheet. Anything that appears in F&I that was not on the original quote is something to push back on immediately.
Finance office add-ons
The F&I office is where dealers add a second round of products after you have agreed on a price. None of them are required at signing.
- Extended warranty (VSC) — Marked up $500–$2,000 above cost. Negotiable in price. You can buy one later. Never required.
- GAP insurance — Legitimate product, but dealers charge 2–3x what your own insurer charges. Buy through your insurance company instead.
- Credit life/disability insurance — Almost always overpriced. Decline and research standalone policies if you need this coverage.
- Tire and wheel protection — Read the actual terms carefully. Many claims are denied on technicalities.
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