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Car Buying and Financing FAQ

What Are Dealer Fees, and Can You Avoid Them?

What Are Dealer Fees, and Can You Avoid Them?

Dealer fees are additional charges added to the vehicle price at the time of purchase. They typically add $500 to $2,500 or more to the out-the-door cost. Some fees are legitimate and unavoidable; others are negotiable or pure profit for the dealer.

Common dealer fees and what they mean:

Fee

Typical Cost

Negotiable?

Documentation (doc) fee

$100 – $500+ (capped by state law in CA, FL, and others)

Sometimes — ask for a reduction

Destination / delivery charge

$900 – $2,000 (set by manufacturer)

No — fixed by manufacturer

Title and registration fees

Varies by state

No — government fees

Dealer prep / vehicle prep

$100 – $500

Yes — often pure markup

Advertising fee

$200 – $600

Sometimes

Market adjustment (ADM)

$500 – $5,000+

Yes — walk away or negotiate down

Extended warranty / service contract

$1,000 – $4,000

Yes — buy separately later if desired

GAP insurance (dealer-sold)

$400 – $900

Yes — shop your insurer instead

Nitrogen tire fill

$150 – $300

Yes — regular air is free and works the same

Paint/fabric protection

$200 – $600

Yes — a common high-profit add-on

What to do: Always ask for a full itemized list of fees before signing. Legitimate fees include the destination charge, government title/registration fees, and sales tax. Question anything else. "Dealer prep" and "market adjustment" fees are negotiating opportunities — and saying " I'll only proceed if those are removed" frequently works.

Key tip: Negotiate the out-the-door price as a single total number, not line by line. This prevents dealers from adjusting fees to offset vehicle price discounts.