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The People You Meet at a Dealership

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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The parade of people you encounter when buying a car may feel like a confounding tactic meant to throw you off balance — but it’s one that car buyers can also use to their advantage.

You might meet multiple sales staff members and managers, from the first person who calls you about a car to the person who finally hands you the keys. We’ll introduce you to each one, what they want, how they go about doing their jobs and how you can best respond to get the best deal on the lot.

The salesperson who calls you on the phone

You could get a call if you filled out an online form because you were interested in a car. Or, you could get a cold call, a sales call made to you without your permission. While the first might be welcome, most people find cold calls extremely annoying — and “most people” could refer to both you and the caller.

Who they are. The person calling could be a dealership salesperson or an employee at a call center (also called a business development center), which may be part of the dealership or a third party company.

What they want. If the person is a call center employee, their goal is to bring customers to the lot. If the person calling is an auto salesperson, they don’t just want you to come in, they want to sell you a car directly.

How they do it. Both call center employees and car salespeople will use charisma to convince you to come and look at cars. Because call center employees usually receive an appointment-based commission — they may get paid for each person who visits the dealership, whether you buy or not — they might disregard any concerns you may have about credit requirements.

Auto salespeople are paid for selling cars, not getting people in the door, so they may ask more questions to figure out if you are worth pursuing. They don’t want to waste their time on customers who can’t afford a vehicle. If they think you can afford a car, they want to make sure that you ask for them specifically. They may repeat their name often or have you write it down as they have lots of competition, even from other salespeople within the same dealership.

Response tactics. If you simply don’t want them to call, say so and tell them to take your number off the call list. If you are interested in what they’re saying, ask for more information and find out if they’re a call center employee or a car salesperson. If you want, you could set an appointment, but before you go to the dealership, make sure you do your own research on prices or any sale the person described. If you’re serious about getting a car, definitely get an auto loan preapproval before setting foot on the lot. Read more on why you should get an auto loan preapproval here.

The regular car salesperson

That stereotypical guy with slicked-back hair in a plaid suit waiting around like a vulture for you to pull up in the parking lot? He still exists, though he may have upgraded to a polo shirt and slacks. This is the most common job at a car dealership.

Who they are. They are usually very good at dealing with people — however, they are usually not experts in cars, and are probably even new to the industry. There is extremely high turnover in auto sales, due to high stress and long hours.

What they want. They want you to buy a car, but much of the process is out of their hands. They don’t set the prices and, like you, they’re at the mercy of a lender’s decision. If they spend five hours with you and you don’t buy for some reason, they may not get paid for their time or risking their lives on a test drive. They want things to go quickly and smoothly to maximize their chances of selling the most cars. And more to this point, they usually want to build a relationship with you in hopes of future business with you or your family and friends.

How they do it. They’re charming or, rather, they try to be. Each salesperson strikes a balance between being helpful (sometimes to the point of subservience) and being an authoritative figure. Even if they’re new to the industry, a salesperson will probably know more about the car-buying process and prices than you do. Don’t feel bad — it’s their job, while you might only buy a car once every seven years.

Salespeople may negotiate on a car price or monthly payment with you; the level to which they are allowed to negotiate depends on the dealership. No matter who sits down with you to talk about money, a common tool is a sheet called the “four square.” This worksheet breaks down four aspects of a car deal.

An old trick is to discuss everything but the car price in the four square. Instead of writing price negotiations in the price box, the salesperson might write reasons why the price is set, such as “leather seats” and “good gas mileage.” At the end of negotiations, the salesperson may write out and ask you to initial or sign something along the lines of “I agree to buy the car today if the monthly payment is less than $600, with a $5,000 trade-in and $1,000 down.” Notice that the price of the car isn’t mentioned.

Response tactics. Don’t let them get away with distracting you from negotiating on the price of the car. A big and most common mistake is focusing on the monthly payment — focusing just on the payment makes it easier for the dealership to keep the car price high and slip other things into your payment. Instead, focus on the car’s price. Look at the monthly payment only after you get the car’s price — if you get a good price on the car, the monthly payment will follow.

Tip: Don’t be afraid to write on the four square yourself. If the salesperson tries to make you focus on everything but the car price, redirect them. Circle the car price that’s written on the four square and put a down arrow next to it. Say that the price needs to go down before you talk about anything else.

The mercenary car salesperson

These are your typical fast-talkers, paid-on-commission-only salespeople who are drastically aggressive, even when saying “yes, ma’am.”

Who they are. They are experts at making money in car sales. They’ve been in the industry a while and take no prisoners. They can cover a few car dealership job positions and function as a salesperson, closer and finance manager (positions we’ll go over next).

They’re generally not dealership employees, but part of another business that a dealership hires to come in and drive up sales for a short period of time. This makes any social repercussions from their work easy to avoid for both them and the dealership, as they usually do this type of work on the road, far from home, and the dealership can tell any disgruntled customers that person doesn’t work for them anymore.

What they want. Because they are usually straight commission, they’re driven to make a profit, and a large profit at that, on one deal. They probably aren’t interested in networking to build a relationship with you and eventually sell a car to your friends and family.

How they do it. The faster everything goes, the less time you have to think. They will try to hurry you through everything from picking a car to a test drive to signing on the dotted line. Remember, a car deal isn’t just about the car — it’s also about the financing and related products, everything from special wax to warranties, GAP waivers and service contracts. They may also use a four square — and before you realize it, a large portion of your money isn’t even being spent on the car itself.

Response tactics. Slow the process down. Tell them they can go help other customers while you think about something. When discussing monthly payments, tell them to explain everything that the payment includes — that way they can’t slip in a warranty or something similar you don’t want. And if they’re too aggressive, find a manager to ask for a different salesperson or go to a different dealership.

The closer

If a salesperson can’t get a commitment from you to buy a car, they may do a T.O., or a “turn over” to the closer; this is usually the sales manager. It’s the next step up from a salesperson in the hierarchy of a car dealership.

Who they are. Savvy negotiators who climbed their way up from being salespeople; they have years of experience and function as operational leaders in the dealership.

What they want. Their first order of business might be to prevent you from walking away. Their last order of business is to have you agree to buy a car at a certain price or monthly payment. They want you to make a commitment to buy.

How they do it. Establishing a rapport with you is important. You might have spent hours with the salesperson and things didn’t go smoothly (or they probably wouldn’t be there). They know that you see them as a random new person walking in to discuss your personal finances — which is to say, they need to quickly convince you to trust them enough to listen — and maybe spend several thousand dollars.

Response tactics. Look at the logic of what they’re saying. The best way to respond is to have other options. If they tell you, “This is a great price for this car!” show them the car’s value as stated in an industry source like the National Automobile Dealer Association’s guides, a free online resource. If they tell you, “This is the best APR you can get!” show them another loan offer or go get one from your bank or credit union to see if that’s true — it could mean thousands off the total cost. If you’re concerned about multiple hard credit pulls damaging your score, know that you can shop around for the best APR without being penalized; getting multiple loan offers within a 14-day window will not hurt your credit any more than getting one loan offer.

The finance manager

A finance manager’s expertise is to increase the total amount you’re paying for the car deal, one way or another. They can also be called the business manager, the F&I manager (finance and insurance) and, inside the dealership, “the spinner,” because they spin the paperwork around on the desk for everyone to sign. It’s considered one of the cushier types of jobs at a car dealership, as it requires a personal office and a lot of sitting inside, instead of walking around outside in whatever the weather is.

Who they are. They are usually experienced car salespeople who climbed the ladder and went through a certification program. They are on par with sales managers, but specialize in negotiating on two levels — with both lenders and customers.

What they want. They want you to spend more money, largely by convincing you to buy add-ons such as warranties, service contracts and GAP, which helps their bottom line. They also want the lender to give a finance offer that will let the dealership make the most money.

How they do it. They use the same principles as magicians — they show and hide things very selectively. If you agreed to buy the car for a payment under $600, the finance manager might tell you something along these lines: “I have good news! I convinced the bank to lower your payment. They had it at $630 but I talked them down to $615 and that’s with a warranty. Sound good? Sign here. Now there’s also a pre-paid maintenance plan we offer…”

What they aren’t saying in this example is that without the warranty, your payment is actually $580 — and they definitely wouldn’t tell you they increased your APR. So if you agreed to the $615 payment plus the maintenance plan, that’s an extra $54 a month for 72 months — you just paid the dealer nearly $4,000 for things other than the car. We break it down below:

Response tactics. Much like you did with the salesperson or the closer, don’t just say “OK” to a monthly payment. Ask what the payment includes and then talk about the total price for each thing. You should not be required to buy anything in order to get a loan or a better deal on a loan. If they say otherwise, tell them to show the requirement to you in writing.

If your APR is over what you think it should be, tell them to “drop the points and take the flat.” When a dealer makes money by increasing your APR, it’s called making points (APR points). But a dealer can still make money by taking a flat rate from the lender instead of making points. Of course, to know what APR you deserve, you should get preapproved loan offers from other lenders before you go to the dealership to shop for cars.

The general manager

If a dealership is a kingdom, the general manager (GM) is king — this person is at the top of the hierarchy of a car dealership.

Who they are. They are in charge of the entire dealership, from the janitors to the managers. They are ultimately responsible for dealership profitability and are held to that by the owner(s). They may have started their careers as a salesperson.

What they want. If you as a customer meet the GM (unlikely, though it does happen occasionally) one of three things could be happening. They’re making rounds to raise customer satisfaction scores, acting as a sales manager to keep their skills sharp and retain the respect of the managers by doing some “floor work” — or there’s a huge problem that needs their attention, in which case expect a quick decision and quick result.

How they do it. Depending on what their mission is, how they accomplish it will vary, but quickly and with authority generally applies.

Response tactics. If you believe the dealership flubbed, make your case. GMs want happy customers and are usually busy, so they may side with you quickly. If they don’t, know that you have other options — there are other dealerships to try.

The service writer

After you buy a car, this is the main person with whom you’d interact if you take your car back to the dealership for servicing, from oil changes to complicated repairs.

Who they are. This person interacts with you if you go for an oil change or car repair. They put the appropriate orders in and deal with any warranty companies — in fact, they may literally run back and forth between the mechanic bays and the customer waiting area.

What they want. They want you to be happy so you’ll continue to come back for servicing and so you may buy more accessories or services from them. There are often bonuses and prizes for service writers who sell parts, accessories and future services to customers.

How they do it. The shadier service writers might tell you that you need parts when you don’t, or that you must have a more expensive part when a cheaper one would do just fine.

Response tactics. Look up what the part costs online. Manufacturer parts (such as Toyota, Ford, Chevy parts) can be three times more expensive than aftermarket parts (ones not made by the manufacturer). If you doubt something needs to be fixed or they refuse to use a less expensive part, get another opinion by taking it to an independent mechanic with a good reputation.

People behind the scenes

There are some people behind the scenes you probably won’t officially meet at a dealership, but may impact you nonetheless.

  • Porters. They may drive off in your trade-in car or bring your new car up to you. In the service drive they could take your car to the mechanic bay and back to the customer area. They drive cars to and from different car lots.
  • Detailers. They clean cars inside and out both as basic upkeep on the cars that are for sale and as a final cleaning after you decide to buy the car, before you receive the keys.
  • Finance director. This person is the head of finance managers. They could step in if there’s a complication with car title paperwork if you need your new car registered out of state or your trade-in has an out-of-state title or registration.
  • General sales manager. This person trains sales staff and is the head of sales managers.
  • Internet sales manager. This person is usually the head of the internal dealership call center, if it has one, and works with the marketing team to post the vehicle details and photos you see online.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Jenn Jones
Jenn Jones |

Jenn Jones is a writer at MagnifyMoney. You can email Jenn at [email protected]

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How to Pay Off Your Car Loan Faster: Here’s What to Consider in 2020

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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There are several ways to pay off your car loan faster, several of them without shelling out an extra dime. Auto debt not only accounts for about 9% of all consumer debt in the U.S., it’s growing: monthly payments are larger, terms are longer and APRs are higher for new and used cars than they were five years ago. Paying off your car as fast as possible frees up that money for other things.

How to pay off your car loan faster without paying more

The faster you pay off your car loan, the less you’ll pay in interest. But it may not always be possible to throw more money at your monthly payment. Here are some ways you may be able to pay off your car faster without paying additional money on the loan.

Refinance

This is the process of applying for a new auto loan to pay off your existing loan, hopefully with a better interest rate or term.

Pros. A refinance loan could help you pay your car off sooner and with a lower interest rate. Maybe your credit score has improved since your original auto loan — the best rates tend to go to those with the best credit. Average rates dropped at the end of 2019 with an average APR of 5.5% for a new car loan versus 6.0% at the same time in 2018.

Cons. Downsides should be few except for the time spent shopping for the best rate and any fees you might have to pay such as those to your state’s department of motor vehicles to transfer your car’s title to the new lender. These costs should be low, under $100.

Who it may be good for. An auto refinance loan may be a good option for you if:

  • You have a high interest rate and either your credit has improved since you signed for the auto loan or you’re not underwater on the auto loan, meaning you do not owe more on your car than it is worth.
  • If you do not face high penalties for paying off your current loan early.
  • You got the auto loan through a dealership, especially a “buy here, pay here” establishment. The average hidden interest rate added by dealers is 2.47% and “buy here, pay here” businesses are known for predatory lending practices.

How to do it. Call your lender to find out how much you owe and your APR. Refinance lenders usually ask for this information, so it’s good to have it on hand. Then you can look for the best auto refinance companies and find potential auto refinance offers.

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Cancel any add-ons

Common auto loan add-ons include GAP waivers, service contracts or extended warranties, tire and wheel warranties and more — you may have agreed to these when you bought your car without understanding the full cost. Canceling them will decrease how much you owe on your auto loan, allowing you to pay off your car loan faster.

Who it may be good for. Anyone who has add-ons may be able to cancel them. The less you owe, the less you pay.

How to do it. Check your car contract, call your lender or call the dealership to see if any add-ons are listed on your paperwork. If there are any, find out what they are and consider canceling them to get a prorated return. You may need to fill out some paperwork to officially cancel the add-ons, but a few hundred dollars may be worth it.

Special note. If your car has a history of needing repairs, take that into consideration before deciding to cancel an extended warranty. If you are underwater on your car loan, think carefully before you cancel GAP, which is made to protect upside-down borrowers.

Make payments every two weeks

Instead of paying once a month, take your existing car payment and split it in half. Paying every two weeks means your loan balance is continually decreasing, which has the effect of paying less interest over the course of the loan.

Why it can be good. This is a way to essentially make an extra payment without forking over extra money.

Who it can be good for. By doing this, you’re not paying any more than you normally would, but it has the effect of making an extra payment a year, so it may be especially good for someone on a tight budget.

How to do it. Check with the lender to be sure you won’t run into any prepayment penalties. If not, make a half payment every two weeks instead of one full payment each month. You could automate your checking account to send the payment, or give permission to the lender to automatically pull the payment.

How to pay off your car faster with the most bang for your buck

Have extra cash to put toward your auto loan? While the methods above are good, the fastest way to pay off your car is to increase the amount you’re spending. Almost all of these tips involve making extra payments to the principal, the amount you owe on the car not including interest. But first check with your lender that you will not be penalized or charged a fee for prepaying your loan.

Make extra payments to the principal

Why it can be good. Auto loans have simple interest, which means that for every dollar you put toward the principal, you pay exponentially less interest to the lender.

Who it can be good for. Anyone who has an auto loan from a lender who doesn’t penalize early payoff or payments to principal.

How to do it. Call the lender and ask how you can make extra payments to the principal only. You should do this because extra payments not to the principal means you’re paying interest — all you’re doing is giving the bank money early. If you make payments to the principal, you’re not paying as much in interest, which is very good.

Round up

If you find it difficult to save money or you don’t have quite enough cash to make a whole extra payment, check out this round-up method.

Why it can be good. You could pay off your auto loan early without changing how often you make your payments.

Who it can be good for. If you have a hard time saving money, this is a good way to do so.

How to do it. If the lender will not charge a prepayment penalty, you have nothing to lose by doing this and you can do it in two ways:

  • Simply round up your monthly payment. For example, if your monthly payment is $350, round up and pay an even $400.
  • Use an app, such as Acorns, to round up what you pay on all of your purchases to the nearest dollar and then pay that money to the auto loan. For example, if you got gas for $15.30, the app would round the charge up to $16 and $0.70 could go into your savings account. A little goes a long way and by the end of the month, you may have $50 you could put toward your auto loan.

Avalanche versus snowball

We’re not talking about the weather; these are two popular methods used to pay off debts faster. The avalanche method prioritizes paying off high-interest debt first. The snowball method involves paying off your debts starting with the lowest amounts. You can read about more debt payoff methods here.

Why it can be good. These are methods that could help you pay off all your debts, not just your car loan.

Who it can be good for. If you have multiple loans or debts, these methods may help you organize them and pay them off.

Snowball method: how to do it. This is a three-step pattern that should allow you to “snowball” your money to pay off your car loan faster.

  1. Look at your loans and rank them from lowest to highest.
  2. Then focus on that smallest loan, paying it off as quickly as you can with any extra cash available while making minimum payments on your other debt.
  3. Once it’s paid off, congratulations! You no longer have that payment to make. Choose another loan and repeat the process, using the money you would have paid on the loan you paid off.

Avalanche method: how to do it. This method prioritizes debt with the highest APR. For example, if you’re paying a higher interest rate on credit card debt than your car loan, you may be better off using any extra cash to pay that down first.

  1. Look at your loans and rank them from highest APR to lowest.
  2. Determine how much extra cash you can put toward the debt with the highest interest while making minimum payments on your other debt.
  3. Once it’s paid off, roll the money you were using to pay down that debt into the next one.

Windfalls

Regular extra payments may not always be realistic for your budget, but if you get any money outside of your budget that you didn’t count on, using that money as one-time extra payment toward the principal could really help.

Why it can be good. Any “windfalls” you have, such as a tax return, a refund, a bonus, a big tip or a pay raise, can be put toward the principal on your auto loan.

Who it can be good for. If you were not counting on the windfall, the extra money you got is just that — extra money. By using it as a payment to principal on your auto loan, you’ll save more money because the less you owe, the less interest you’ll pay.

How to do it. It might take some self-control, but use the windfall cash to pay the auto loan. The sooner you’ll pay it off, the more money you’ll have later to spend on things you’ll enjoy.

Make extra income

If your regular paycheck isn’t able to stretch any further, consider a side hustle and put the earnings toward your auto loan.

Why it can be good. A part-time job a few hours a week could add up to enough cash to make a significant dent in what you owe.

Who it can be good for. Anyone with some extra free time may be able to find a part-time job, temp work, freelance assignment or other gig.

How to do it. Depending on what you’re willing and able to do, you could sign up at a temporary work agency, look on job sites and/or talk to people you know about any job opportunities. Just remember to spend the money you make on paying off the principal of the auto loan. You can check out 15 legitimate places that will pay you to work from home and 5 ways to make extra money that don’t take much time.

Remove extra expenses

What are you willing to cut out of your budget or give up to pay off your car loan faster? Again, every bit helps, if the extra cash goes toward the principal of your auto loan.

Why it can be good. If you aren’t willing or able to make more income, spending less can be an equally good option and, as a bonus, you can keep doing it even after your car is paid off and save the money.

Who it can be good for. Practically anyone could do this.

How to do it. Take a look at your credit card statement or write down what you buy so you can see your spending habits in black and white. Then, decide what you could cut out or possibly get a better deal on — it might add up to more than you think. Maybe you could eat out once a week instead of every day. Maybe you could find cheaper auto insurance. Then apply that savings to your auto loan principal.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Jenn Jones
Jenn Jones |

Jenn Jones is a writer at MagnifyMoney. You can email Jenn at [email protected]

Advertiser Disclosure

Auto Loan

Dealer Fees to Know When Buying a Car in 2020

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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Don’t pat yourself on the back too early if you’ve just negotiated a great price on a new car. No, you’re not done yet — not when auto dealers can add thousands of dollars in the form of fees and products to the price of that new car, truck or SUV.

After all, there’s a reason why the term “sticker shock” comes from the auto dealership world. The good news? You don’t have to take onerous dealer fees lying down.

Sure, there are some new vehicle fees you’ll have to pay. There’s no getting around destination charges and fees that may be required by your state or county, such as title and registration costs. There are, however, good reasons to steer clear of — or negotiate — dealer add-ons such as extended warranties and GAP insurance. This story will help you understand the differences between fees you’ll have to pay, what’s negotiable, and fees you should avoid at all costs.

The auto dealer fees you must pay

You’ll see these fees on your final auto purchase bill and there’s no way around it – you have to pay them:

Destination fee

New vehicles don’t drive themselves to dealer lots (although that day may be coming).

For now, the auto manufacturer delivers the vehicle to the dealership and there’s a fee to be paid for that — one that you, the buyer, have to pay. Expect to pay hundreds, or as much as $1,000-plus, for the mandatory destination fee.

You’ll see the destination fee listed on the window sticker and there’s no point in negotiating it with the dealer, though it should be noted that some manufacturer destination fees are higher than others. You should read the sticker carefully to make sure the dealer is keeping mandatory destination fees separate from negotiable “delivery” fees. These so-called secondary destination fees, such as delivery inspection or dealer preparation fees, are negotiable. We’ll discuss them in more detail later.

Title, tag and registration fees

These are also mandatory, this time by your state or county. These fees funnel through the dealer, typically to your state’s department of motor vehicles, stamping you as the owner of your new vehicle and pays for your temporary tags that get you roadworthy.

Expect to pay as much as $250 to register and title your car, dependent on the state where you reside.

Documentation fee

Another “must pay” fee, the documentation fee is the fee the dealer charges for handling all the red tape and generating the administrative documents needed to process your new car acquisition.

You’ll see this fee in advance on your new vehicle contract and, depending on your home state, the fee can cost between $100 and $500. Some states cap the fee. You have to pay this fee, but there’s no rule that says you can’t ask the dealer to lower the price of the vehicle by the exact amount of the documentation fee. Learn more about how to negotiate car price.

Sales tax

In most states, you’ll need to pay a sales tax on your new car, truck or SUV, but the amount charged not only depends on the state where you reside, it also depends on whether your state charges for the full price of the vehicle, or the total price minus the value of any trade-in vehicle that was included in the deal.

If you purchase your vehicle out of state, you’ll pay the sales tax when you receive the vehicle and you register the vehicle in your state of primary residence.

Your sales tax depends on the tax charged by your state, but sales tax fees can generally range from 3% to 9% across the U.S., including county and local sales taxes. Many dealerships will roll sales tax into the title and registration fees we discussed earlier into one TT&L (tax, title and license) fee. Some dealers say to expect to pay between 8% and 10% of the sales price in taxes and fees. This rule of thumb applies to new and used cars.

How much car can you afford? This story might help.

Vehicle inspection fee

A new vehicle must pass certain inspections before it can be sold, based on the standards and criteria mandated by the state where the vehicle owner resides.

The fee, which is paid for by the dealer and passed on to the customer, doesn’t amount to much (about $7 to $30 per vehicle, dependent on your state.) The low fee isn’t really worth the trouble of negotiating it off of the total car price, but it is a fee that has to be paid.

These auto dealer fees should be avoided, contested or closely considered

You may see these auto dealer fees on your new vehicle contract but in most cases, you can avoid them, or at least contest them.

Advertising fee

You might think that it’s up to the dealership to pay for its own advertising and promotional costs, but you’d be wrong. The fact is, an advertising fee can appear on your new car invoice listed as a component of the vehicle’s manufacturer’s resale price or it can appear on your contract as a separate cost.

You can contest this fee and negotiate directly with the dealer — it’s not mandatory. If you don’t, you may pay several hundred dollars for the fee.

Extended warranty

Technically a product, an extended warranty covers any significant repairs needed on the vehicle after the original manufacturer’s warranty expires.

You don’t have to pay for an extended warranty, so feel free to avoid it altogether.

If you change your mind, and decide that an extended warranty is worth the cost, you can also go back to the dealer and buy the warranty later, but before the original warranty expires. The cost of an extended warranty isn’t cheap — anywhere from about $1,000 to several thousand dollars — but compare that with the cost of paying $4,500 for a new engine after the original warranty expires.

Dealer preparation fee

Often, auto dealers will charge a dealer preparation fee for cleaning up the car for you before you drive it off the lot. There is absolutely no need to pay this fee, which can range from $100 to $400.

Think of the fee this way — why should you pay extra for a fee to clean up a new vehicle that you just paid $35,000 to purchase? Shouldn’t the car appear clean, shiny and free of any problems at closing? Take the mindset that, yes, it should, and fight the fee accordingly.

Rustproofing and undercoating fee

Dealers will also try to stick you with so-called “treatment” fees that protect against Mother Nature and rocky roadways. The fee, which can cost around $800 to the dealer, aren’t really necessary in this day and age, as manufacturing technology has provided better protection for undercarriages and vehicle exteriors.

The dealer may also charge for other “appearance” packages including window tinting and tire and wheel warranties. These are also optional, so consider each one carefully, including cost and how important they are to you.

GAP insurance costs

In some cases, buying GAP insurance if you’re buying a new vehicle and want to add extra protection may be a good idea — it can cover the “gap” between an auto insurance claim payment and the amount of money owed on a heavily damaged or destroyed vehicle.

The thing is, you don’t have to buy it from the lender or dealer. In doing so, costs can be as high as $700 or more and is rolled in to your car loan, which also includes interest paid on the total loan, boosting the GAP insurance price up higher. Better to shop around among insurance companies who’ll likely offer you a better deal and cut out the dealer altogether from GAP insurance.

VIN etching fee

Your dealer may also try to sell you a theft-protection tool called vehicle identification etching, or “VIN” fee, which covers the cost of etching your VIN on the vehicle’s front window to thwart auto thieves.

While it’s always a good idea to protect your vehicle anyway you can, there’s no reason to have the dealer do the etching for $200 or more, when it only costs them $25 to do the job. A mechanic can do the job for much less. Some counties will offer the service free, so check with your local government office.

Stand your ground

When you’re in the throes of love for that brand-new vehicle you just purchased, it’s easy to gloss over fees and extra costs that dealers love to charge to pad their bottom line.

Don’t fall for many of those fees. While some extra costs are mandatory, there are plenty of new car dealer fees than can and should be avoided.

Stand your ground and use the tips above to make sure you’re not paying more than you should for your new car. Dealers also love to pad your APR, so in addition to the fees we described here, don’t make these common mistakes when shopping for an auto loan. Before heading to the lot, research the best auto loan rates.

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APR

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Fees

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LendingTree is our parent company

LendingTree is our parent company. LendingTree is unique in that they allow you to compare multiple, auto loan offers within minutes. Everything is done online. LendingTree is not a lender, but their service connects you with up to five offers from auto loan lenders based on your creditworthiness.

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Brian O
Brian O'Connell |

Brian O'Connell is a writer at MagnifyMoney. You can email Brian here