Dealer Fees:
What to Pay vs What to Refuse
The complete guide to understanding dealer fees. Know exactly which charges are legitimate and which are profit grabs before you step foot in a dealership.
$1,500
Avg. junk fees per deal
8+
Common fees to refuse
$85
CA doc fee cap
Legitimate Fees You Must Pay
These fees are standard, unavoidable, and generally non-negotiable (except doc fees in some states).
Destination & Delivery
Manufacturer charge to ship the car from factory to dealer. Set by manufacturer and identical at all dealers.
Sales Tax
State and local sales tax based on where you register. Ranges from 0% (Montana) to 10%+ (some cities).
Title & Registration
State fees to transfer title and register the vehicle. Dealer cannot mark this up—it goes directly to the DMV.
Documentation Fee
NegotiableDealer fee for processing paperwork. Legitimate but often inflated. Capped in some states, negotiable in others.
Fees to Refuse or Negotiate
These are dealer profit centers, not legitimate costs. Refuse them or negotiate them down significantly.
Market Adjustment (ADM)
AvoidPure markup above MSRP on high-demand vehicles. Always negotiable—or find another dealer selling at MSRP.
Walk away and shop other dealers
Dealer Prep/Reconditioning
AvoidCleaning and inspection that dealers are already compensated for by the manufacturer. Refuse this fee.
Refuse - already included in MSRP
Advertising Fee
AvoidDealer passes their marketing costs to you. This is a business expense, not your responsibility.
Refuse - not your expense
VIN Etching
AvoidAnti-theft etching you can do yourself with a $30 kit. Massive dealer markup for minimal protection.
DIY for $30 if you want it
Nitrogen Tire Fill
AvoidRegular air is 78% nitrogen anyway. No meaningful benefit for passenger vehicles. Complete waste of money.
Refuse - no real benefit
Paint Protection/Sealant
AvoidDealer-applied wax that wears off in months. Modern factory clear coats provide excellent protection already.
Factory paint is sufficient
Fabric Protection
AvoidScotchgard-type spray you can buy for $20. Often poorly applied. Do it yourself if you want it.
Buy a $20 can instead
Dealer-Installed Accessories
AvoidOften marked up 200-400% over aftermarket. Wheel locks, cargo mats, and splash guards cost far less elsewhere.
Buy aftermarket for 50%+ less
Doc Fee Caps by State
Some states protect consumers by capping documentation fees. Know your state's rules before negotiating.
| State | Doc Fee Cap | Notes |
|---|---|---|
| California | $85 | Strictly enforced cap |
| New York | $175 | Regulated by state |
| Texas | $150 | Reasonable state limit |
| Washington | $200 | State regulated |
| Oregon | $115 | One of the lowest caps |
| Maryland | $500 | Higher cap but limited |
| Florida | No cap | Typically $700-$1,000 |
| Colorado | No cap | Often $500-$800 |
| Georgia | No cap | Can exceed $700 |
| Arizona | No cap | Typically $400-$600 |
| Nevada | No cap | Often $500-$800 |
| Illinois | No cap | Varies widely |
Not all states shown. Contact your state attorney general for specific regulations.
Negotiation Scripts That Work
Use these exact phrases to push back on dealer fees. Be polite but firm.
For Market Adjustment
"I understand demand is high, but I'm not comfortable paying over MSRP. I'd like to proceed at sticker price, or I'll need to wait for inventory to normalize."
For Junk Fees
"I'd like you to remove the [VIN etching/paint protection/nitrogen fill]. These aren't services I requested, and I won't be paying for them."
For High Doc Fee
"Your doc fee seems high compared to other dealers I've visited. Can you reduce it to match the $300 fee I was quoted elsewhere?"
The Nuclear Option
"I've done my research and I know what these services cost. If you can't remove these add-ons, I'll have to take my business elsewhere. I have quotes from other dealers without these fees."
Always Negotiate the Out-the-Door Price
The out-the-door (OTD) price is the total amount you'll pay to drive away. This prevents dealers from hiding fees or shifting numbers around. Always say: "What's the out-the-door price?"
Get OTD quotes from multiple dealers
Email dealers requesting their best OTD price on the specific vehicle.
Request itemized breakdown
Make sure every fee is listed separately so you can identify junk fees.
Compare apples to apples
When comparing quotes, make sure tax rates match (based on your zip code).
Sample OTD Breakdown
$35,000 MSRP vehicle in a 7% tax state
Watch out: If a dealer adds fees beyond these (dealer prep, VIN etch, etc.), push back immediately.
The F&I Office: Where Dealers Make Their Money
After agreeing on a price, you'll be sent to the Finance & Insurance office. This is where dealers often make more profit than on the car itself.
Extended Warranty
Often overpriced at the dealer. Compare to manufacturer and third-party options before buying.
Negotiate or shop elsewhere
GAP Insurance
Worth having if you're financing a lot, but your auto insurer often offers it for 50% less.
Get quotes from your insurer first
Credit Life Insurance
Rarely necessary. Standard life insurance is almost always a better value.
Usually decline
Tire & Wheel Protection
The math rarely works out. Self-insure by saving what you'd pay in premiums.
Usually decline
Key Tip
The F&I manager may present monthly payments that include products you didn't agree to. Always review the final contract line by line before signing. Don't let fatigue or pressure rush you—this is where expensive mistakes happen.
Frequently Asked Questions
What is a dealer documentation fee?
A doc fee covers the dealer's cost of processing paperwork for your purchase. It typically ranges from $0-$995 depending on your state. Some states cap this fee (California at $85), while others have no limit. Always ask what the fee is upfront.
Can I negotiate dealer fees?
Yes, most fees are negotiable except government-mandated ones (tax, title, registration) and manufacturer destination charges. Doc fees, dealer prep, and all add-ons can be negotiated or removed entirely.
What is ADM or market adjustment?
ADM (Additional Dealer Markup) is a price increase above MSRP on high-demand vehicles. It's pure profit for the dealer and always negotiable. Many dealers sell at MSRP—shop around.
Is VIN etching worth it?
No. Dealers charge $200-$400 for something you can DIY for $30. The anti-theft benefit is minimal, and most insurance companies no longer offer discounts for it.
Should I buy dealer paint protection?
No. It's essentially expensive wax that wears off in months. Modern factory clear coats provide excellent protection. If you want paint protection film (PPF), get it from a dedicated installer.
See What Others Actually Paid
Compare your quote against real transactions from verified buyers. Know if the OTD price you're being quoted is fair before you sign.