Car Dealer Fees: Required vs Optional

🟢 REQUIRED FEES (Government-Mandated)

These are the only fees you MUST pay by law:

State & Local Taxes

• Sales tax (varies by state/county/city)
• Personal property tax
• Vehicle license tax (annual)

Government Registration Fees

• Title fee ($4-$150 depending on state)
• Registration fee (varies by state - some charge flat fee, others by weight/age)
• License plate/tag fee

🟡 GRAY AREA FEES (Semi-Legitimate)

Documentation (Doc) Fee

• What it is: Processing paperwork fee
• Reality: Ranges from $85 (California cap) to $1,000+ (Florida)
• Can you negotiate? YES! Dealer can reduce car price by doc fee amount
• Tip: Many states cap these fees - research your state’s limit

🔴 OPTIONAL/FAKE FEES (Always Negotiable)

These add no real value and should be avoided:

Completely Fake “Prep” Fees

• Vehicle Prep Fee
• Dealer Prep for Delivery Fee
• Pre-Delivery Service Fee
• Pre-Delivery Inspection Fee
• Reconditioning Fee
• Additional Destination Fee
• Cash up-charge

Overpriced Add-Ons

• VIN Etching (can get elsewhere for much less)
• Nitrogen-filled tires (minimal benefit over regular air)
• Paint protection (local shop is cheaper)
• Pinstripes (overpriced cosmetic add-on)
• CarFax fee (reputable dealers should provide free)

Extended Protection Packages

• Paint & fabric protection
• Interior protection products
• Theft deterrent systems
• GPS tracking systems
• Windshield protection
• Door edge guards

💡 KEY NEGOTIATION Tips

Before You Buy

1. Ask for “Out-the-Door” price upfront
2. Research your state’s doc fee cap
3. Know which fees are truly required

At the Dealership

• Question every non-government fee
• Ask to remove fake fees entirely
• For installed add-ons you don’t want, ask for “at cost” pricing
• Walk away if they won’t negotiate fake fees

Magic Phrases

• “I don’t pay for prep fees - that should be included in the selling price”
• “Please remove all non-government fees from this contract”
• “I’ll need the out-the-door price with only required government fees”

⚠️ Red Flags

• Dealer says any fee is “required by law” (except taxes/government fees)
• Processing/doc fees over your state’s legal limit
• Any fee over $1,000 for basic services
• Refusing to explain what a fee covers
• Pressuring you to accept add-ons as “mandatory”

🎯 Bottom Line

Only 3 categories are truly required:

1. Taxes (sales, property, license)
2. Title/Registration fees
3. License plates

Everything else is negotiable or removable!