It would be nice if buying a car was as easy as paying the price the vehicle is listed at. That, unfortunately, isn’t usually the case. There’s always going to be a few hidden fees and costs that sneak in at the last minute. Some of these are negotiable. Others, not so much.

You shouldn’t just accept whatever the seller wants to charge you. Talk with them to determine why you’re being charged these things and feel free to challenge them on any of the extra costs that spring up. Listed below are five common hidden costs you might not be ready for.

Financing Charges

hidden costs

When you finance a car, you have to pay interest. This means there are extra costs rolled up into the loan. So when you finance a vehicle for $31,000, you end up paying much more than that by the end of the loan term. Focus on getting the best interest rate to reduce the amount that financing will cost you in the long run. It’s usually a good idea to get your financing first. That way you can’t be talked into a car that’s more expensive than you want to pay. Also, this allows you to shop around and find the very best rate to keep the cost of financing as low as possible.

Leasing Charges

leasing fee

If you’re thinking leasing is a good way to avoid financing charges, think again. Leasing has its own downsides. When calculating the monthly lease payment, a fee is added that’s basically the equivalent of a financing charge. While you can’t avoid this fee entirely, you can often shop around for the best lease rate and minimize its impact. You should do this anyway when shopping for a car to lease, so make sure you do your due diligence and shop around.  

Dealer Fees

dealer fees

Dealer fees vary from place to place. It’s smart to ask about these fees before purchasing a car because they do add up and can add a few hundred dollars to our overall costs. If you discuss the dealer fees ahead of time, you may be able to avoid them or determine that it’s better to shop elsewhere.

Common dealer fees include car preparation, payment and paperwork processing, floor plan fee, advertising fee, compliance fee, and title and licensing fees. Make sure to talk with the salesperson about each fee. There may be ways of eliminating some of them.


man selling upsells on a car

Upsells aren’t necessarily hidden costs, but most people aren’t ready when the financing manager or sales person hit them with the upsell offers. Usually, upsells – like extended warranties and credit insurance – simply aren’t worth it and will only add to the cost of your car. Don’t just take the financing manager’s word for it.

According to Michael Caudill, owner of Driven Public Relations, told U.S. News that the financing manager gets a cut of these upsells and is basically a salesman. So, while he or she may make the offers sound great, they’re often interested in the sale more than getting you the best deal possible.



This is an example of a fee that you sometimes can’t get away from. Taxes are non-negotiable, but in certain instances, you can travel to a different county or state to buy a car and save a little money. This isn’t always the case, though and the distance you travel may negate the advantages. It’s worth looking into, but not worth obsessing over. Get the facts on taxes, and then accept whatever costs you need to.