Buying a new vehicle is an exciting experience, that is, until you see the number of fees you’re hit with! Some of these fees are conveniently rolled into your monthly payments, but you still want to be aware of what extra things you have to cover. You don’t want to get stuck paying for fees that aren’t really necessary.
Below we’ll cover the most common fees you encounter when purchasing a new or used vehicle. Keep in mind that every state is different in how they charge sales tax on trade-ins and rebates. Plus, most states don’t have a cap on documentation fees, so they can range from $50-$400 or more depending on where you live.
What Fees Can I Expect When Purchasing a Car?
Generally speaking, there are three categories of fees you will encounter when purchasing a used or repossessed vehicle:
- Title and registration fees. When you buy a used car, you’ll need to transfer the title and register the vehicle in your name. Without a title in your name, there is no way to prove that you are the owner of the vehicle.
- Used car sales tax. You’ll probably have to pay a used car sales tax when purchasing a pre-owned vehicle. The amount you pay depends on the state you’re buying the car in.
- Documentation fee. Most states require you to pay a documentation fee before driving away with the vehicle. This fee covers things like processing paperwork, storing documents and writing up contracts.
Aside from these fees, you may have to pay the following as well:
- Export and shipping fees. If you purchase a repossessed vehicle from a different state, consider how you’ll get the car. You may have to pay a third party to ship the repo to you.
- Sales taxes. Depending on your state, you may have to pay sales taxes on the vehicle. Some factors can influence the taxes you pay, such as trading in another vehicle or qualifying for rebates and incentives.
- Repairs. Cars sold through auctions often need some repairs, so be sure to factor these into your cost. It’s best to stick with cars and trucks that only require light repair work like tire and break changes.
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