Used Car Buyers Pay an Average of $640 in Hidden Fees — Here’s How To Avoid Them
Written by
Gabrielle Olya
Edited by
Zuri Anderson
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Many car buyers opt for used cars over new ones for the cost savings — but even used vehicles now cost a pretty penny. According to the latest data from Edmunds, the average transaction price for a 3-year-old used vehicle is now $30,522, marking the first time this figure has surpassed $30,000 since 2023.
Unfortunately, hidden fees often add to the already high costs used car buyers are paying. A new report from CoPilot found that hidden fees add an extra $640 on average to car prices.
Here are the most common hidden fees used car buyers should watch out for, plus, how they can avoid them.
Common Hidden Fees Used Car Buyers Encounter
Used car buyers often encounter hidden fees in the context of “bait-and-switch pricing.”
“The reason this is misleading is that these fees are on top of the advertised price and are not disclosed before the consumer gets into the dealership — and often not until the very end of their time in the dealership,” said Pat Ryan, CEO of CoPilot.
“The lower advertised price ‘baits’ the consumer to go into the dealership, and then the price is ‘switched’ to a higher price in order to actually be able to purchase the car. This is important because the same consumer’s leverage is strongest before they go into the dealership, and the leverage shifts to the dealer once they get into the dealership.”
There are two types of hidden fees that fall into this “bait-and-switch” pricing tactic, the first of which is illegitimate fees.
“These are charges that dealers add to the bottom line price to buy the car that are designed to increase dealer profitability on the car,” Ryan said. “Some common examples include market adjustment fees, reconditioning fees and exterior paint protection.”
The other type are excessive fees.
“These are charges for standard services or vehicle accessories, but the amount that the dealer is charging for them is excessive and above the typical average for their state,” Ryan added. “Some common examples include license fees and plate fees, the amount of which is capped by the state and cannot exceed a certain amount.”
Buyers should also be wary of “extras” a dealer will try to upcharge you for during the buying process.
“Another common bait-and-switch pricing trap to look out for is when dealers charge for add-on equipment and service packages that the customer did not ask for, nor that were included in the advertised price of the car,” Ryan said. “For example, these can include extra accessories like LoJack and exterior or interior protection, or unsolicited services like oil changes or extended warranties.”
How To Avoid Hidden Fees When Buying a Used Car
The best way to avoid hidden fees is to find a dealership you can trust.
“Car shoppers should start by finding a dealer who believes in being honest and transparent,” Ryan said. “The most important step they can take is to email or call the dealer and ask for the out-the-door price in writing before going to the dealer in person to ensure that price does not include any illegitimate or excessive fees.
“If you visit the dealer without a commitment from them on an out-the-door price, you will lose your leverage in the negotiation process.”
Buyers should also do research before going to the dealer so they know which fees are mandatory, and what these fees cost where they live.
“Then you’ll be prepared when you see an itemized breakdown of charges, and be able to push back on any charges that seem unnecessary or higher than average,” Ryan said.
Don’t be afraid to push back on any fees that you believe are too high or unnecessary.
“If a dealer is unwilling to negotiate, feel free to call them out by saying something like, ‘It feels like you’re trying to bait-and-switch me with this price,'” Ryan said. “If they still won’t budge, that can be a telling sign about the way they do business.”
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