Unexpected Costs That Come with Buying a Car

Learn about the hidden costs of car buying.

Whether you are looking to buy a new or used car, you need to be prepared to make a significant financial investment.  However, it’s important to understand that a car’s sticker price isn’t the only cost that you need to be ready for.  In fact, there are a considerable number of extra costs that you should anticipate.  Here are some of the hidden costs of car buying.


Many car buyers forget that they will be subject to sales tax and, in some states, personal property taxes when they buy a car.  While this isn’t really a hidden cost, it is often overlooked, and car buyers forget to calculate taxes into their final cost.

Filing Fees

When you buy a car, you will encounter a number of additional fees that will be added to your final cost.  Some of the most common fees include the following:

  • Vehicle Registration Fees– This is about the same as when you renew your car registration every year.
  • Title Fees– Covers the cost of registering or transferring the car title to you.
  • Documentation Fee– Car dealerships charge this fee to cover the cost of processing the paperwork related to your car purchase.
  • Emissions Testing and Compliance Fee– This fee covers the amount that the dealership had to pay to ensure that the car passed the U.S. emissions inspection when it was received.
  • Advertising Fee– Dealers will often charge this fee to cover the cost of advertising the vehicle. Keep an eye out for this fee because many dealers will remove it, but only if the buyer notices it.
  • Dealer Preparation Fee– These fees are included in the dealership paperwork and are said to cover the cost of shipping and handling the car when the dealership first acquired the vehicle.


Add-ons usually come into play when you are in the finance manager’s office.  Add-ons are a way for dealerships to sell customers things like warranties, additional forms of insurance, and even oil change and tire rotation bundles.  Make sure that you listen carefully and ask qualifying questions to ensure that you know what each add-on does and what it will cost.  Keep in mind that finance managers are still salespeople.  While an add-on might sound like a good value, it really might not be worth it for you.  So, use your best judgment before agreeing to add-ons.

If you are looking for a new car, then make sure you are aware of these hidden costs of car buying.  Once you find your perfect car, it’s important that you get it the protection it needs.  For assistance with all your auto insurance needs, contact the experts at John E. Peakes Insurance Agency today.

By John E. Peakes Insurance Agency

Since we opened in 1969, John E. Peakes Insurance Agency Inc. has provided personalized insurance solutions for local families and businesses. As an independent agency, we can offer our clients a wide range of coverage options from over 30 carriers. From homeowners and auto insurance to business coverages such as commercial property and general liability insurance, we have the policies that you need.

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