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Car Buying TipsEverything you need to know about buying a new car

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Miscellaneous Fees

Tax, license and warranty...oh my!

Miscellaneous Fees

When you negotiate the price of a car, you are determining the base price of the car and additional option packages. Once you have done so it is not the time to let your guard down. When you're sitting across from the dealer you will be confronted with several other ways to spend money. Some are just necessary evils like tax and licensing and others are purely optional such as warranties.

NOTE: We like to negotiate on something called an “out-the-door-price” that includes the price of the car, option packages, and the extra fees listed below. You can try to do this as well since all of these costs get rolled into your car loan and it will give you the most accurate picture of the total cost of your new car. Keep in mind that some of these prices are negotiable, but licensing and taxes are set by the state and will have a set cost attached to them.

  1. Warranty
    An extended warranty is an insurance policy on your car. All cars come with a standard warranty and the length of it varies from car to car. All dealers will try to sell you an extended warranty. There is no need to purchase an extended warranty on the same day you buy your new car. You can purchase an extended warranty at any time while you are covered under your factory warranty. But, if you want to buy an extended warranty from the dealer, you can negotiate the price. The price they tell you doesn't mean that is the price you have to buy it for.

  2. Licensing
    You'll have to pay license and registration fees mandated by your state when you sign for your new car. Expect to pay between $50-200. Note that these annual fees will decrease as your car depreciates.

  3. Tax
    Don't forget to factor sales tax into the price of your car. Apply your local sales tax to the total cost of your negotiated price. For instance, if you live in a state and county where the sales tax is 7.25% and the car you want is $25,000, the tax would be $1,812.50. Now your new car is $26,812.50. Some states apply tax to the monthly payment.