The Endless List of Fees a New Car Dealer Charges You

Go to a new car dealer’s with the serious intent to buy a new car, and you get struck with a virtual hurricane of jargon of all the different kinds of fees they plan to charge you. Who really knows what these things mean? You do, if you read the rest of this article. Let’s start with the A’s. The Additional Dealer Markup is a silly made-up fee the new car dealer dreams up just for you. That’s what they have to pay to their financers for all the stocks of cars that they keep. Usually, they pay about $100 a month in interest for every car on the lot. They want you to pay it for them. The thing is, the car factory usually helps dealers with this. But they’ll just go around and collect it all over again from you too. Isn’t that convenient? If the car has been sitting there on their lot for three months, they’ll have collected that fee three times from the car factory. But they still want you to pay for it. It’s an absolute insult to your intelligence, and you want no part of it.

How about the dealer prep charge? That’s the charge that the dealer collects from you to ready the car for sale – they take the plastic off the seats, do any superficial cleaning that needs to be done, put on a coat of wax on and check the fluids. For this, they want you to pay $500. What can it take them, an hour to finish the job? How could they in good conscience charge $500 an hour for such a job? Another funny fee they love collecting from you is the Drive Off Deposit. That’s just a completely made up fee that the new car dealer collects from you to try to balance out the rebate that they may have given you. It’s just stealing, plain and simple, and you don’t want them to do it on your coin.

And finally, the Factory Holdback is something you want to watch out for. The factory holds back 2% or 3% of the price of a car from the dealer until they actually sell it. Once the car is sold, they’ll give dealer the their money back. What dealers do is, they try to double charge it – once from the car company, and once from you. If you see this on your invoice, ask to have it removed or threaten to walk out. It is well worth the effort to display some backbone.