Top 3 Hidden Costs in Car Buying


Car buying involves hidden costs. The price of the car is not the only cost that you have to pay when buying a new car. Additional costs include taxes, DMV fees, and other government fees. A detailed breakdown of the hidden costs of car buying is written below.

Hidden Costs in Car Buying

1. Local Sale and State Taxes

Local and state sales tax goes to the government. These payments are determined by law. However, dealers might add certain amounts on this to earn more. Buyers should know the exact amount to make sure that they are charged with the exact amount.

2. Motor Vehicle Department Fees

Payments to the motor vehicle department are also included on the hidden costs. This is an exact fee determined by law. This is used to make sure of the motor vehicle owners’ welfare. Car dealers could add extra amount on this. It is very important for car buyers to know the exact fee.

3. Documentation Fees

The documentation fee is often included as part of the hidden cost. This covers the cost of all the documentation involved in the transaction. Documentation fees are not always the same. It varies from one state to another.

There are states which set a fixed documentation fee while others do not. The state of California for example sets the documentation fee at $45. State policies such as this provide assurance to buyers from paying amounts larger than what is required. Unnecessary charges from dealers are reduced in these states.

On the other hand, car dealers on states without fixed documentation fees most of the time charge clients extra amounts. This is possible since there is no standard fee. To avoid this situation, you should always ask the sales rep of the hidden charges outside the real deal.

Knowing the total expenses involved in car buying will save you from paying extra charges. This also allows you to prepare extra amount for hidden costs. This is necessary for completing the car buying experience. Hidden costs should not be taken as an inconvenience, but a legitimate part of car buying.

About Marty Bay

Marty Bay is the Lead Writer and Editor for VPM Automotive. He has researched and reviewed 100s of cars, and writes extensively about car technologies.
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