Financial Education

10 Hidden Fees to Watch Out for When Buying a Car

Written by MCU | Feb 10, 2025 10:43:59 PM

Buying a car in New York City is already expensive, but hidden fees can make it even worse. If you’re not careful, dealers will try to slip in extra charges that inflate the final cost. Knowing what to look for can help you avoid overpaying and keep more money in your pocket. Here are the top 10 dealer fees to watch out for when shopping for a car in NYC.

1. Destination Fee

This is the cost of transporting the vehicle from the manufacturer to the dealership, often hidden in the fine print. While this fee is standard, always check to ensure the dealer isn’t charging extra delivery fees on top of it.

2. Dealer Preparation Fee

Some dealers charge for prepping the car—removing plastic wraps, checking fluids, and cleaning the vehicle. These tasks are standard dealership operations, so try negotiating this fee down or having it removed altogether.

3. Vehicle Registration Fee

While registering your car with the DMV is necessary, some dealers overcharge for handling this process. In NYC, registration fees vary by weight, so check the official DMV rates to ensure you aren’t being overbilled.

4. VIN Etching Fee

VIN etching, which deters theft by marking the car’s identification number on windows, is often pushed by dealers at an inflated cost. You can buy a DIY kit online for about $20 instead of paying $300-$400 at a dealership.

5. Advertising Fee

Some dealers pass their marketing costs onto customers, adding fees labeled as "advertising" or "solicitation." Don’t fall for this—dealers should cover their own advertising expenses, not you.

6. Window Tinting and Other Add-Ons

Many dealerships automatically add window tinting, nitrogen-filled tires, or fabric protection at a steep markup. If you don’t want these extras, request a vehicle without them or negotiate the cost.

7. Sales Taxes

NYC sales tax on cars is 8.875%, which adds a hefty amount to your purchase price. While you can’t avoid it, trading in an old car can lower your taxable amount, helping you save.

8. Extended Warranty

Dealers will push extended warranties, sometimes charging up to $2,000. Instead of buying it at the dealership, shop around or wait until your factory warranty is about to expire to explore better options.

9. Dealer Markup Fee

For in-demand models, dealers may add thousands of dollars in markup fees just because they can. If you see a markup, shop around at other dealerships or wait until demand cools down.

10. Rebates and Discounts

Manufacturer rebates can reduce your price, but they come from the automaker—not the dealer. Some dealers might make it seem like they’re giving you a deal, but rebates should not affect your ability to negotiate the best price.

Final Tip

Always request a fee breakdown before signing. Question any excessive charges. Comparing quotes, shopping multiple dealerships, and negotiating smartly can save you money. Visit the MCU Auto Center to explore TrueCar’s dealer network for transparent pricing and no surprises.