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What you’ll pay beyond a car’s sticker price
Don't forget to factor in dealership fees, taxes, insurance premiums and more.
In order to drive your new or new-to-you car off the lot, you’ll need to pay the dealer, the government, the gas station and maybe even a mechanic. Aside from looking at the price of the car itself, don’t forget to factor in the below expenses when figuring out how much you’ll have to shell out.
Most states require you to have liability insurance before you’re legally allowed to drive your car. This covers you for any damage you cause to other people or their property. Your car insurance provider or local DMV should be able to tell you your state’s minimum car insurance requirements.
Your car will need to be registered with the local DMV or Secretary of State. Depending on the state you live in, you may need to register the car as soon as you buy it. Or if you’re buying used, it may already be registered with the previous owner, in which case you’ll just need to transfer the title.
In some states, you may also need to pay to have an emissions test when you register the vehicle.
Sales tax on car purchases vary by state. Depending on where you live, you could pay anywhere from 0% to 11% or more in taxes. Research the laws of your state and county to find out exactly what you’ll pay.
If you’re buying a used car, you’ll pay taxes when you register the car.
If you’re buying a new or used car from a dealership, you may be charged a documentation fee, also known as a doc fee, for the time the dealer spent preparing contracts and paperwork.
In some states, there’s a cap on how much dealers can charge. For example, in California, the maximum amount a dealer can charge for documentation is $80 as of July 2019.
If you’re buying a new car, you’ll likely be charged a destination fee. This is what the dealer pays, plus profit in some cases, for shipping the car from the manufacturer to the dealership.
If you’re buying a used car, it’s a good idea to have it checked out by an independent mechanic to make sure the car doesn’t have any defects you should be aware of. A prepurchase inspection usually costs around $100 to $200, but charges vary based on the mechanic.
Most cars aren’t going to come fully filled, so you may need to gas up your car as soon as you leave the dealership.
Compare your car loan options
The sticker price of your car doesn’t include everything you’ll need to pay, and the extra fees and taxes can start to add up. Make sure you understand the total amount you’ll be on the hook for before getting a car loan so you don’t end up short on cash.
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