Can You Avoid Paying Dealership Fees?

For many people, going to the dealership has always brought a lot of stress and anxiety. From pushy salespeople to hidden dealership fees, dealerships have quite a reputation for themselves. However, from 2020 onward, dealerships have become even more miserable with insane markups, low inventory, and a guarantee that you won’t get a good deal. So, is there any way to make buying a car better? Since car prices are so high, let’s see if you can avoid paying dealership fees.

A customer learning how to buy a new car during the semiconductor microchip shortage.
Dealership customer | J. Conrad Williams Jr./Newsday RM via Getty Images

Why do people hate car dealerships so much? 

Look at any car dealership today; you’ll find depressingly low inventory and grotesque prices that seem more like prices Danny Divitto would do in Matilda than they do anything else. Ok, maybe that reference isn’t helpful. Moving on. The point is that dealerships are getting so bad that manufacturers like Ford and GM are now threatening dealers about price gouging. 

If that weren’t bad enough, all the old issues with dealers, like hidden fees, are also still around. So how can the average person not get hosed at the dealership?

Can you avoid bogus dealership fees? 

a dealer lot with a mix of cars and trucks
A Ford dealership in Richmond, California | David Paul Morris/Bloomberg

Many of the fees dealers charge are government-mandated. Things like taxes and documentation or conveyance charges come from the government, but that doesn’t mean the dealers are still getting theirs. 

According to Consumer Reports, covering your title’s cost is common and reasonable. This fee should normally be between 1-3 percent of the vehicle’s cost. However, some dealers will add a little fat on top of that for “processing.” This is worth contesting. If the dealer doesn’t come off the added fee, you can ask for added accessories to make the deal happen. You can always walk if the deal doesn’t work for you. Never be afraid to show them your back. 

Some dealers will try to charge for something called an “advertising fee.” You should simply say to no to this charge. Oftentimes, advertising fees will be built into the sticker price. Customers aren’t responsible for paying for dealers’ advertising. Again, this is a great chance to make sellers take you seriously by walking if they don’t remove these fees. 

One of the biggest added fees is the “delivery” or “preparation” charge. Consumer Reports says sealers sometimes add a second sticker next to the official one, listing charges with names like “pre-delivery inspection,” “dealer prep,” “vehicle prep,” and “vehicle procurement.” CR says to contest all of these. There is already a built-in destination charge you’ll pay. CR also notes that the mandatory destination charge should also come with a free full tank of fuel. Don’t let this little perk go. 

Should you pay more than MSRP for a new car? 

A person checking a car for potentially more quality issues at a dealership.
Person checking a car | Getty Images

While many of these sketchy fees can be negotiated and even taken off, the inventory shortage has caused dealers to start charging more for cars than the OEMs say the car is worth. This market adjustment pricing is a tough one to avoid. It is especially rampant in super popular models like the Corvette C8 Z06 and the Ford Bronco. 

Seeing as how the manufacturers don’t support these prices and it’s not a government-mandated fee, these numbers are all technically flexible. Always make sure to try and negotiate that down. Paying over MSRP may be difficult to avoid in today’s market, but it is certainly worth the effort. New car depreciation is real, and it’ll hit twice as hard for those buying cars grossly marked up. Avoid this if you can. 

Remember to wear your best walking shoes anytime you go to the dealership. You can always say no. 

RELATED: Chevy Dealership Asks $100,000 Over MSRP for a 2023 Chevy Corvette Z06