Are there any additional fees after putting money down to finance a car?

My dealer requires a $1,000 down payment, which is fine. My question is whether I need to pay any additional fees after paying that $1,000 to drive it off the lot. Will I need to pay more than my $1,000 down payment to take the car?

Answer
While down payments can help you lower your monthly rates and secure better terms, they are not the only fees you’ll need to pay before taking your car off the lot.
The drive-off cost, or the collection of fees you need to pay before taking the car, is made of the following charges:
  • Down payment: This is a percentage of your loan that you pay upfront to prove your ability to make payments.
  • Documentation fee: Also known as processing fees, these are what your dealer charges you to fill out and file your paperwork. This usually costs less than $100.
  • Sales tax: While Alaska, Delaware, New Hampshire, Montana, and Oregon don’t have sales tax on cars—sales tax in other states ranges from 2-7%.
  • Title and registration fees: No matter where you buy your car, you’ll need to pay title and registration fees. While dealers will sometimes take care of it for you, others might let you handle it yourself. That said, it typically costs between $11-$325 depending on your state and vehicle.
  • Dealer-specific fees: Some dealers might add additional charges for their services.
Unfortunately, these fees are often hidden in the fine print. You can find out your drive-off cost by asking your dealer about their out-the-door cost as soon as you walk in. You should get an upfront answer with all the information you need.
The final fee you need to pay before driving off the lot is insurance. Dealerships will require proof of insurance before you can drive off the lot. Also, keep in mind that lenders will require full coverage car insurance for your financed vehicle.
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Joshua Levy
Answered on Dec 07, 2021
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