14 States Where Dealers Charge the Most Fees When You Buy a New Car
Written by
Vance Cariaga
Edited by
Gary Dudak
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Buying a new car means paying for a lot more than just a machine on four wheels. You’ll also have to pay sales taxes in most states, along with title and registration fees. While those costs can’t be avoided, there are other fees you might get hit with that you should think twice about before paying.
These so-called “nonsense fees” might include advertising fees, loan payment fees, document fees and market adjustment fees. According to the Jalopnik website, the Federal Trade Commission has signaled its desire to crack down on some of these junk fees. But dealers are pushing back because the fees often mean big profits (even though they have little value to consumers).
Mitigating the Fees
One way to avoid the fees is to simply walk away if the dealer doesn’t agree to waive them. Here are some other tips from Car and Driver:
- Compare quotes among different dealersto get a better idea who has the lowest fees.
- Familiarize yourself with the most common fees so you’ll know which ones fall into the nonsense category.
- Negotiate the price of the car to help offset the cost of high fees. Many dealers are willing to negotiate to complete the vehicle purchase.
- Buy through a private seller to avoid certain fees that dealerships commonly charge.
States With the Highest Fees
If you’re in the market for a new car, where you live can help determine how much you can expect to pay in fees. An analysis conducted by GOBankingRates looked at numerous metrics to determine how much it costs to buy a new car in each state, on average.
Following are the 14 states with the highest average dealer fees for new cars:
- Louisiana: $6,369
- Colorado: $5,890
- Arizona: $5,791
- Alabama: $5,490
- Arkansas: $5,045
- California: $4,960
- Michigan: $4,902
- Missouri: $4,877
- Kansas: $4,772
- Florida: $4,655
- Nevada: $4,572
- Nebraska: $4,266
- Mississippi: $4,125
- Utah: $4,099
As you can see, these states are located all over the country, so if you live close to the border of one, it may be wise to comparison shop out of state for a potentially better deal.
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