4 Car Buying Hidden Costs Most Auto Dealers Don’t Tell You About

March 10th, 2017 by

When you set out to purchase a car, there are a few things you end up paying for beyond the sticker price. Now, some dealerships might try and hide these fees to keep you from understanding what you’re paying for, but honestly, that approach doesn’t make much sense to me. The additional fees added to a vehicle’s purchase price are there because they have to be. If dealerships weren’t required to charge for these extras, many wouldn’t. 

4 Car Buying Hidden Costs

4 Car Buying Hidden Costs Most Auto Dealers Don’t Tell You AboutGetting the vehicle you want at a price you can afford is a great goal to have when you walk into a dealership. And, finding a dealership that can help you accomplish that goal is even better. One way you can find out if the dealership you’re working with has your best interests in mind is how they handle the hidden costs of purchasing a car. Below, I’ve listed the top four car buying hidden costs that everyone who goes to a dealership should be aware of. 


These fees are what each state requires for every vehicle before it drives off the lot. Without tags, title, and registration, your vehicle cannot be legally driven. You can learn all about Minnesota’s registration and licensing requirements here


With the majority of states, some products and services are taxable and others are not. Here in Minnesota, there is a 6.5 percent tax on all vehicle purchases. This is a requirement regardless of whether you purchase from a dealership, a leasing company, or a private party. There are a few exceptions, but the majority of automobile purchases are taxed. 


The state of Minnesota requires vehicle owners who live and/or primarily drive in Minnesota to have the following insurances:

  1. No-fault insurance
  2. Liability insurance
  3. Uninsured motorist insurance

Remember, when ownership transfers to you, you need to have your own insurance in place. 


Dealers oftentimes add fees for prepping your car, processing your paperwork, and setting up your financing auto loan. While this is a standard process in dealerships, it should raise your red flags if the dealership tries to hide these fees or charge them without you realizing. 

Each of the fees I’ve listed above is a standard part of the car buying process. For the most part, what you should pay attention to is how the salesperson you work with handles these fees. Are they upfront and open about what each fee entails and willing to explain the reasoning behind it? If they’re not, they might not be a salesperson you want to work with.

For the best results, be clear with your salesperson that you are interested in understanding the fees added to your purchase – especially since some salespeople might not bring these up under the assumption that you aren’t interested in discussing the fees. 


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