You’ve walked countless lots and gone on more test drives than you can remember. You see the light at the end of the tunnel and are almost ready to drive away in your new car. The only problem? It’s come time to discuss the bill, and the number staring back at you is off by a few thousand dollars. The sticker price gave you the hope that you found a great deal, but the car dealership used some creative accounting to tack on a few surprise fees.  

Sure, it’s frustrating, but the dealership knows what they’re doing, right?  

…Right? 

The Dealership’s Hidden Fees 

The truth is, car dealerships know exactly what they’re doing with hidden fees. In Arizona, businesses are charged something called a transaction privilege tax (TPT), which is essentially a fee that the Department of Revenue charges for operating a business in Arizona. The TPT only applies the total proceeds of the sale, leaving all service fees untouched by the extra tax.  

This is where the fees come into play. 

At the end of the day, a car dealership’s number one goal is to make a profit. Since taxes eat into that profit, they add fees separate from the total cost of the vehicle. This lets the dealership bring in more revenue while reducing its tax burden.  

The law specifies that the fees must be reasonable, so you won’t see any large-ticket fees. However, this doesn’t prevent dealerships from inflicting death by a thousand cuts. The fees can stack up quickly, and if you don’t know what to look for, you’ll be in for a nasty surprise when you start talking finances. 

The best protection is knowledge, so here is a list of common fees that you may run into at the dealership. 

1. Dealer Document Fee 

When a dealer sells a car, they usually prepare and process the paperwork needed to get the title and registration for the buyer. This is referred to as the dealer document fee, or simply a doc fee. Some states set limits on doc fees, but Arizona does not have a limit. 

2. Dealer Service Fee  

A dealer service fee is a catch-all term for various services the dealership might offer, like vehicle inspections, cleaning, or handling other administrative tasks. These fees are usually added to increase the dealership’s profit margin, and dealerships are typically not willing to negotiate on service fees. 

3. Advertising Fees 

Advertising is part of owning a business. If you discover that a dealership is charging you an advertising fee, make a point to dispute it. You wouldn’t stand for Coca-Cola raising their price to make you pay for their advertising, and it’s no different when purchasing a new vehicle.   

4. Anti-Theft Fees 

Anti-theft fees can include services like VIN etching or installing wheel locks. While these features might add a layer of security to your vehicle, they are often overpriced at the dealership. If you’re interested in these services, consider getting them done elsewhere for a lower cost.  

5. Market Adjustments 

Market adjustments are fees added when a vehicle is in high demand. Dealerships may charge more than the MSRP, claiming the increase is due to the market’s demand. These fees are often negotiable, and it’s important to challenge them if you feel the dealership is taking advantage of the situation. 

Tips to Avoid Hidden Fees at the Car Dealership 

There are some fees that are unavoidable. Local, state, and federal governments impose regulations that the dealership must comply with, and these fees will need to be paid. Examples of necessary fees include the destination charge, TTL (Title, Tax, and License fees), and inspection fees. While it’s worth looking out for excessive price tags on these fees, you will not be able to avoid them. 

Other fees, however, are set and enforced only by the dealer. These fees are subject to wiggle room and, with some negotiation, can be adjusted to lower your total cost. Below are some of our tips to help you avoid hidden fees at the car dealership 

1. Ask for an Out-The-Door (OTD) Quote 

The out-the-door (OTD) quote is the total amount that you will pay for the vehicle, taxes, and other fees. Asking for a breakdown of the OTD price will give you the truest idea of what you will be paying for your vehicle. Although many dealerships claim that the fees are non-negotiable, you can often lower the expense by negotiating the total price rather than individual fees. 

2. Be Wary of Extras 

Once you begin discussing the specifics of the sale, the dealership may start to pepper in extra features, accessories, or services. Most of the time, these options are not worth the extra price and can often be obtained outside of the dealership for much lower prices. The tonneau cover for your F-150 might cost you thousands of dollars at the dealership, but an authorized re-seller can often provide the same cover for a fraction of the price. 

3. Visit Multiple Dealerships 

One of the best ways to handle excessive fees is to shop around and obtain quotes from multiple dealerships. Request an OTD quote from each dealership to see how their prices compare. Be sure that you are comparing the same vehicle at each dealership, as a standard trim vehicle will have a much lower MSRP than the higher trim options. With a range of prices in hand, you hold the power to call more expensive dealerships out on their fees. 

Avoid Car Dealership Hidden Fees at Centennial Leasing & Sales 

If you are concerned about shady tactics and hidden fees, you’re not alone.  

At Centennial Leasing & Sales, we believe that shameless profiteering has no place in car sales. Our auto brokers work for you, and delivering a smooth and pleasant car buying experience is our top priority. When you start a discussion with one of our staff members, they aren’t building a sale—they’re building a relationship. We want you to get exactly the car that you want at a price that keeps you coming back. 

We take pride in providing complete transparency throughout the entire process to give you the BEST vehicle buying experience.