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Auto
Loan & Leasing Calculators
Glossary
of Auto & Leasing Terms
All About EECU
Auto Financing
What Is EECU
Direct?
When is
the Best Time to Purchase a Vehicle?
How
Much of a Monthly Car Payment Can You Afford?
How
Will You Pay for Your New Vehicle (buy or lease)?
What
is the Right Vehicle for You?
How to Test
Drive a Vehicle
Should You Trade
In Your Used Vehicle?
Wheeling
and Dealing
Closing
the Deal
Your
credit union makes auto financing fast, easy and affordable.
View our current
rates
EECU never charges a pre-payment penalty if you pay off your
loan early. We also use the “simple interest method” to calculate
loan interest, which means we only charge you interest on the
remaining principle loan amount. There are several other “creative”
methods some lenders use to calculate interest on loans, which
can cost you more money over the life of your loan (even if
the monthly payments remain the same).
Apply
online, or
Call us at (314) 298-0055 or (800) 522-6009
Values
obtained are close approximations, not exact values.
What
Car Can I Afford?
How
Much Will My Monthly Payment Be?
Complete List
of Auto Loan & Leasing Calculators
Top
of Page
EECU
Direct is a special vehicle lending program which enables you
to complete an EECU auto loan application at select auto dealers
in the greater St. Louis area. By completing your application
at the dealership, you save time because you’re able to purchase
the vehicle and receive low EECU financing at one location.
Once you’ve located the vehicle you wish to purchase, simply
tell the finance person at the dealership that you want to finance
it through EECU. Chances are, the dealership participates in
the EECU Direct network of dealers. View
EECU Direct Dealer Network.
The application process is fast and simple. In most cases,
you’ll receive loan approval even if EECU’s offices are closed.
So the next time you’re at the dealership and you need auto
financing, remember to tell them that you want EECU Direct financing!
If you have any questions about this service, please call us
at (314) 298-055 or (800) 522-6009.
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of Page
Timing
is important when working to get the best deal on a new vehicle.
One good time to buy is during late December. Lots of people
are still purchasing Christmas gifts, rather than vehicles,
which leaves dealer lots empty. This motivates dealers to negotiate
on price. Plus, dealers usually have year-end sales records
they are trying to beat.
Another good time to buy is between July and October. During
these months, next year’s models arrive. This motivates dealers
to clear out last year’s models so they can sell the newest
vehicles.
If you can wait until the last Saturday of the month, you may
also benefit. Most dealerships have monthly sales goals and
buying on the last day of the month could give you more pricing
leverage.
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of Page
Some
“experts” believe your monthly car payment shouldn’t exceed
20 percent of your monthly net income (“take home pay”). Even
if you own two or more vehicles and make monthly payments on
all of them, your total monthly auto loan payments should not
exceed 20 percent of your monthly net income.
However, this 20 percent figure is simply one opinion. Your
credit union, on the other hand, believes that each individual’s
situation is different. You may be able to handle more or less
depending on your individual financial situation. If you’re
unsure, call one of our loan experts at (314) 298-0055 or (800)
522-6009. They can help you determine an appropriate loan payment
you can handle. You can also run some numbers on your own by
using one of our calculators below.
Calculators:
Values
obtained are close approximations, not exact values.
What
Car Can I Afford?
How
Much Will My Monthly Payment Be?
Complete
List of Auto Loan & Leasing Calculators
Top
of Page
Basically,
there are three different ways to pay for your new vehicle:
Pay cash.
Borrow money
from EECU.
Lease the vehicle.
Should you
buy or lease?
The first way to pay for a new vehicle is to pay cash.
If you have the money available to purchase a vehicle outright,
consider yourself fortunate. There are two differing views
on whether paying cash for a vehicle is the best choice.
- Some
people believe if you have $20,000 cash on hand for
a new car, why not pay for it outright? The transaction
is less complicated for both you and the dealer.
And, being a cash buyer may give you some leverage
during the price negotiation process. Plus, you won’t
have monthly car payments to make, thus freeing up
more of your monthly disposable income for savings
or other expenses.
- Other
people believe if you have $20,000 available, why
not invest these funds? Historically, the stock market
provides higher rates of return than the interest
rate you’ll pay on an auto loan. However, investing
in a non-insured investment like a mutual fund or
stock is no guarantee of an investment gain. If your
risk tolerance for investments is more on the conservative
side, you could invest the funds in a more traditional,
federally-insured savings account, like a certificate
of deposit or money market account. Even though you’ll
have a monthly car loan payment, the interest you
pay on your car loan will be offset (to some extent)
by your investment gains.
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In the end, the decision whether or not to pay cash for a vehicle
depends on your individual financial situation and cash needs.
If you’re unsure what to do, call one of our loan experts at
(314) 298-0055 or (800) 522-6009.
Calculator:
Values
obtained are close approximations, not exact values.
Should
I Finance or Pay Cash?
The second way to pay for a new (or used) vehicle is
to borrow money and make payments over a fixed term. If you
need a new or used vehicle loan, you can obtain fast, easy and
affordable financing through your credit union. We provide
100% financing, so no down payments are necessary. View our
current loan rates
Depending on your individual situation, you may want to get
pre-approved from EECU for an auto loan before you begin shopping
for your new vehicle. Taking this approach offers several advantages:
- You
can determine the loan amount and the monthly payment
you qualify for before you begin shopping. This keeps
you focused and helps you narrow your choices of vehicles,
which saves you time and frustration.
- You
can analyze your financial situation in a relaxed
setting, rather than feeling rushed to get a loan
after you’re emotionally attached to a new vehicle.
- You
can present an EECU loan pre-approval certificate
to the dealer to demonstrate that your serious about
the transaction. This may persuade the salesperson
to negotiate more with you on price
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It’s important to note that if you’re comparing auto loan rates
and payments between EECU and other lenders, make certain you’re
comparing the same loan term and loan amount. In addition,
verify how loan interest is calculated and whether a pre-payment
penalty exists. EECU never charges a pre-payment penalty if
you pay off your loan early. We also use the “simple interest
method” to calculate loan interest, which means we only charge
you interest on the remaining principle loan amount. There
are several other “creative” methods some lenders use to calculate
interest on loans, which can cost you more money over the life
of your loan (even if the monthly payments remain the same).
Just make sure before you sign on the dotted line, you have
all the facts.
How to Get Pre-Approved
Apply
online
Call us at (314) 298-0055 or (800) 522-6009
Already Found a Car and Aren’t Pre-Approved?
If you’ve already found the vehicle you wish to purchase,
you can complete an EECU auto loan application at the dealer
(if they participate in the EECU Direct network of dealers).
View EECU Dealer
Direct Network
Simply tell the finance person at the dealer that you want to
finance your vehicle through EECU. In most cases, you’ll receive
loan approval even when our offices are closed. You’ll save
time because you can take care of everything at the dealer.
Plus, you receive a great rate and low monthly payment by financing
your vehicle through EECU.
Calculators:
Values obtained are close approximations, not exact values.
What
Car Can I Afford?
How
Much Will My Monthly Payment Be?
Complete List of
Auto Loan & Leasing Calculators
Top
of Page
The third way to pay for a new vehicle is to lease it
from a dealer, car manufacturer or other independent leasing
company (EECU does not lease vehicles). Leasing provides a
way to drive a more expensive vehicle for less money. If you
change cars every 5 years or less and tend to drive only 12,000
– 15,000 miles per year, leasing may be an option to consider.
Overview of How Leasing Works
When you lease a vehicle, you’re only using (and paying
for) part of the vehicle’s useful life and then you return it
to the leasing company at the end of the lease period. So,
you pay just for the time you use the car. What you pay for
during the lease is the dollar amount the vehicle is expected
to depreciate over the lease period, plus interest and fees.
At the end of the lease, you do not own the car, and you are
able to walk away from it or buy it at a set price.
Negotiating Selling Price on a Lease is Critical
Before you begin your lease, you and the salesperson
agree to the selling price of the vehicle, which is called the
capitalized value or gross cap cost. You can
reduce your monthly lease payments by making a deposit (capitalized
cost reduction). Or, even better, you can negotiate a better
selling price up front by knowing a fair price for the vehicle.
Tip: Never walk into a dealership and announce that you want
to lease a vehicle. If a salesperson tells you the cost of
the vehicle is not important on a lease, walk away. The capitalized
value, or selling price, of a vehicle is a very important component
of the lease and it will directly impact your monthly payment
amount, as well as the total amount you pay over the lease period.
The “Money Factor” is Also Important to Negotiate
The term “money factor” is lease-speak for “interest
rate” and plays an important part for calculating a lease payment.
Your goal is to obtain the lowest money factor as possible.
If the money factor is expressed as a percentage, you can convert
the percentage into the money factor by dividing the percentage
by 24 (regardless of lease period). For example, an 8 percent
(.08) interest rate converts to a .0033 money factor.
Lease Payments vs. Loan Payments
Your monthly lease payments can be significantly lower
than loan payments, if you lease a car that holds its resale
value well. This is because you are only paying for the depreciation
plus interest for the leased vehicle. But, at the end of the
lease period, you have no equity in the vehicle. However, after
2, 3 or 4 years of making loan payments on a purchased vehicle,
you do have some equity established.
Types of Lease Contracts
Lease contracts are either closed-end or open-end. A
closed-end lease contract enables you to either purchase the
vehicle at a pre-determined price or turn it in at the end of
the lease period. An open-end contract requires an evaluation
of the actual depreciation of the vehicle at the end of the
lease. If the vehicle is worth as much or more than the agreed
amount specified in the contract, you owe nothing. However,
if the vehicle is valued at less, you must pay the difference.
While open-end leases often have lower monthly payments, they
are risky because of the uncertainty of the vehicle’s value
at the end of the lease. Again, this is why it’s critical to
select a vehicle that holds its resale value well.
Tip: The predicted value of the vehicle at the end of the lease
period (residual value) is expressed as a percentage of the
MSRP (the sticker price) and is an important factor, particularly
in open-end contracts. Most vehicles have a residual value
of roughly 50 – 55 percent for a 36-month lease. If you want
to purchase the vehicle at the end of the contract, you want
to negotiate a lower residual value up front. If you don’t
plan to purchase the vehicle at the end of the lease, a higher
residual value should be negotiated up front.
Understand the Contract Before Signing
Leasing contracts and terminology can be confusing.
So, read the contract carefully before signing and make sure
you completely understand its terms.
Beware of low lease payments that seem to good to be true.
Some lease companies use capitalized cost reduction which
requires more money up front as a deposit. This “down payment”
is not refundable and may make monthly payments look unusually
low.
Beware of “$0 down” advertisements for leases. From an advertising
perspective, “$0 down” really means capitalized cost reduction.
But, what about fees? Typically, there are fees due when you
sign the lease agreement (lease closing) such as dealer fees,
acquisition fees, state taxes, licensing fees, etc. that can
add up. In addition, fees can be shifted to the end of a lease
period in the form of disposition or termination fees. This
is why you should ask, and be aware of, all closing costs and
that they are detailed in the lease contract.
Also, check the lease contract about what happens if you need
to move out-of-state. Most dealers and leasing companies don’t
allow their leased vehicles to leave the state from where the
lease was originated. If your lease does allow you to move
to another state during your lease term, monthly payments will
need to be recalculated since state tax rates differ. This
could mean big headaches, fees and even penalties.
How to Get the Best Lease Deal
- Don’t
tell the salesperson you want to lease until after
mutual agreement is reached for the capitalized value
(selling price) for the vehicle.
- Don’t
talk about monthly payments with a salesperson. Once
you’re identified as a payment shopper, you could
be taken advantage of.
- Negotiate
the lowest capitalized value (selling price) for the
vehicle by knowing its fair market price before you
visit the dealer. View
new vehicle pricing.
- Negotiate
the highest residual value (predicted value at the
end of the lease period) for the vehicle, if you don’t
plan to purchase the vehicle at the end of the term.
Sometimes, dealers use a higher residual value up
front to lower monthly payments, which is okay unless
you plan to purchase the vehicle at the end of the
lease term.
- Negotiate
the lowest “money factor.”
- Pay
as little (or no) money down, with little (or no)
security deposit.
- Make
sure the capitalized value (selling price) you negotiated
and agreed to with the dealer appears on the lease
contract and NOT the MSRP figure.
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Calculators:
Values obtained are close approximations, not exact values.
Complete List
of Auto Loan & Leasing Calculators
Top
of Page
The decision whether to buy or lease your next new vehicle depends
on many individual preferences, such as: Do you like to keep
your vehicles for a long time? Do you want a new vehicle every
two-to-three years? Do you not mind not owning your vehicle?
Do you fully understand leases?
The information listed below summarizes the pros and cons of
buying and leasing.
Advantages of Buying
- You
own the car
- More
economical in the long run
- Drive
as many miles as you want
- Sell
the car whenever you want
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Disadvantages of Buying
- Higher
down payment required in some cases
- Higher
monthly payments
- You
are responsible for maintenance costs
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Advantages of Leasing
- Drive
a better car for less money
- Lower
down payment in most cases
- Lower
monthly payment
- Lower
maintenance costs (factory warranty usually covers
you)
- Drive
a new car every two or three years
- You
pay sales tax only on the portion of the car you finance
(unless you live in Illinois or Texas where you pay
sales tax
- on
the full amount of the car)
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Disadvantages of Leasing
- You
don’t own the car
- Mileage
is limited to a fixed amount per year, usually 10,000
– 15,000 miles
- Leasing
is more expensive in the long run
- Lease
contracts are confusing
- Wear
and tear charges can add up
- It’s
hard to terminate a lease early
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You should not lease if:
- You
like to keep cars for a long time (more than 3 or
4 years)
- You
drive more than 12,000 miles each year
- You
plan to move out of the state from where the lease
would originate shortly after getting your new car
- You
are upside down on your current car loan or lease
- You
expect your car needs to change
- You
enjoy owning your car
- You
don’t completely understand leasing contracts
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In the end, the decision whether to buy or lease depends on
your individual needs. Just remember, to carefully consider
all your options and make sure you understand everything. If
you have any questions about buying or leasing, contact your
credit union at (314) 298-0055 or (800) 522-6009.
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of Page
Finding a vehicle that fits your needs requires homework. While
some people want a vehicle that looks great, others seek practicality
based on a vehicle’s features, overall reliability and price.
In the end, finding the perfect vehicle for you will depend
on numerous factors. This is why answering some key questions
up front can help narrow down your choices.
-
What class of vehicle do you want?
- Compact
Car
- Sport
Utility Vehicle (SUV)
- Minivan
- Sports
Car
- Pickup
Truck
- Family
Sedan
- How
many people are in your family? Or,
how many people will regularly ride in the vehicle?
- 1-2
- 3-4
- 5
- 6
- more
than 6
- What
do you want most out of your vehicle?
- Performance
- Economy
- Mix
of economy and comfort
- Luxurious
comfort
- Ability
to tow
- What
will be the vehicle’s primary use?
- Commuting
- Second
family car
- Business
- Car
pools/transporting large family
- Looking
good
- How
important is the vehicle’s crash safety, compared to fuel economy and style?
- Unimportant
- Not
very important
- Important
- Very
Important
- Critical
- What
type of image should your vehicle project, and how important is that image
to your buying decision?
- Fast-paced,
fashionable/sporty, image very important
- Economical,
socially conscious, image not very important
- Family-oriented,
down-to-earth, image somewhat important
- Wealthy,
prestigious, image very important
- Practical,
image unimportant
- What’s
the largest item you might carry in your vehicle?
- Weekend
bag/duffel bag
- Groceries
- Several
medium-sized suitcases
- Home
improvement items/tools
- Christmas
tree
- How
willing are you to sacrifice fuel economy for size?
- Not
at all
- Somewhat
- Very
- Completely
- Do
you want a four-wheel drive or all wheel drive vehicle?
- Yes
- No
- How
important is it for the vehicle to hold its resale value?
- Not
at all important
- Somewhat
important
- Very
important
- Critical
Some
other questions to consider include:
- Are
there specific features you must have on your new
vehicle? If so, write these down ahead of time to
help narrow down your choices.
- Will
the vehicle fit into your garage or parking area?
- What
is the vehicle’s maintenance/repair history?
- Do
you have a specific price range in mind?
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Once you answer these choices, you can begin doing some research.
By matching vehicles that meet your criteria, you’ll systematically
narrow down your choices to a vehicle that best meets your individual
needs. An excellent place to start is Consumer Reports,
a magazine published by an independent, non-profit organization.
Each April, they publish an auto issue that includes information
on over 100 vehicles. Mechanics and your insurance company
can also supply information about the vehicles you’re considering
to purchase. In addition, you can call your credit union at
(314) 298-0055 or (800) 522-6009. We can help point you to
other sources of information that can be helpful.
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of Page
Taking a vehicle on a test drive is an important part
of the buying process and should be taken seriously. A test
drive demonstrates the vehicle’s performance and helps you become
more familiar with its features.
Once you have narrowed down the number of vehicles you are interested
in purchasing, arrange some test drives through local dealerships.
When phoning a dealership, set up an appointment and tell the
salesperson you will not be buying the vehicle that day—you
are only interested in how the vehicle drives. Set aside a
full day to test drive all the vehicles you are interested in
so you can accurately compare them. Consider taking a checklist
with you to score each of the vehicles right after taking the
test drive. Doing this minimizes confusion when trying to recall
different impressions and experiences about several vehicles.
You may also want to bring a pad of paper to write down other
things about the car you like and dislike.
- Some
points to consider scoring on a test drive:
- Acceleration
- A/C
and heater
- Visibility
(check for blind spots)
- Engine
noise
- Passing
acceleration
- Hill
climbing power
- Braking
- Cornering
- Suspension
- Seat
comfort
- Headroom,
legroom
- Gauge
readability
- Stereo
- Rattles
and squeaks
- Cargo
space
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During the test drive, the salesperson may begin asking leading
questions. No matter how much you like the vehicle, remain
noncommittal. If the salesperson senses that you love the car,
he may try to press you into buying. Restate that you’re only
interested in test driving this car today and that you plan
to test drive others.
After the test drive, if you are certain you want to purchase
the vehicle, remain noncommittal. Copy the figures on the sticker,
including the base price and all options and their costs. Doing
this allows you to do some more research after the test drive
to learn a reasonable price to offer for the car.
Also, look for the stock number of the vehicle (a number usually
posted on the windshield) so you can locate the vehicle again
when you return. At this point, the salesperson may try to
lead you inside the dealership to begin negotiations. Resist
offers of brochures, coffee or promises to “see what kind of
payments we can work out.” Instead, take a business card from
the salesperson and leave.
Then, go on to the next test drive. You may find out that you
like the next vehicle even better. And, if you do like more
than one vehicle, you will be in a better bargaining position
when you’re ready to buy.
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It’s convenient to take care of buying a new vehicle
and trading in your old vehicle at one location. However, if
you choose to trade in your used vehicle, you may not receive
full value.
Dealers often use a source of information, such as the NADA
guide or Kelley
Blue Book, to help them determine values of used vehicles.
These guides contain pricing information for “trade in” (price
they give you for your old vehicle) and “retail” (price they
can sell your old vehicle for to another person). The trade
in values are always lower than the retail values. And, local
dealers seem to use the trade in values listed in Kelley Blue
Book, versus those listed in NADA (however, NADA retail values
seem to be more universally accepted).
In addition, trading in your old vehicle when buying a new one
makes the deal more complicated. There are several different
numbers to negotiate on, which can be confusing for consumers.
This confusion may motivate some dealers to hide profit and
give you what may look like a good deal, when in fact, it isn’t.
However, there are times when trading in a used vehicle makes
sense. You may not have time to sell your old car. Preparing
the vehicle, placing ads, taking phone calls and arranging appointments
with people may seem so undesirable or time consuming that the
time required isn’t worth the effort.
If you choose to trade in your used vehicle to a dealer, follow
these steps:
- Negotiate
the price for the new vehicle you wish to purchase
BEFORE telling the dealer you plan to trade in your
old car. Once you agree to a price for the new car,
then tell them you plan to trade in.
- Conduct
research to find out the value for your vehicle. Consider
using several sources of information to verify a fair
value. Some helpful web sites include: NADA
and Kelley
Blue Book.
- If
you owe money on your existing vehicle, obtain the
payoff information from the financing source.
- Clean
the exterior and interior of your car thoroughly.
Remove all personal items.
- Change
the oil and filter.
- Have
all maintenance records organized in the glove compartment.
- If
anything is broken on your vehicle, consider repairing
it.
- Or,
obtain a cost for fixing the repair ahead of time
so you can work with the dealer to arrive at a fair
price reduction for the flaw.
- If
you are “upside down” on your vehicle (you owe more
than it’s worth), consider postponing the purchase
of the new vehicle.
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of Page
Whether you’re buying a new or used vehicle, the steps
in negotiating a purchase and obtaining financing are the same.
But first, you should know the answers to these questions:
- Will
you pay cash, finance or lease the vehicle?
- If
you plan to finance or lease, which vehicles fit into
your monthly budget?
- What
is a fair price for the vehicle(s) you’re considering
purchasing?
- If
you plan to trade in, what is a fair price for your
used vehicle?
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Once you know the answers to the above questions, you’re ready
to begin the process of actually buying your new car.
Step one is to investigate your financing options before you
make your car-buying trip. View EECU’s current vehicle
loan rates. Consider applying for your vehicle loan ahead
of time to receive pre-approval from your credit union. To receive
pre-approval, apply
online or call us at (314) 298-0055 or (800) 522-6009.
Next, set up appointments to talk with each dealership. Try
to make an appointment with the fleet manager, who may be willing
to work more with you on the vehicle’s pricing or have knowledge
of special programs. If the fleet manager cannot meet with
you, ask to meet with the sales manager. If this doesn’t work,
visit the dealership and find a salesperson you feel comfortable
with. If you’re approached by a salesperson you don’t like
or that you don’t think will treat you fairly, leave. There
are a lot of good salespeople who treat customers with respect.
It’s time for negotiations. The salesperson will begin by asking
something like, “What kind of monthly payment are you looking
for?” Beware of the payment question! Negotiating price on
the monthly payment alone can cost you tons of money because
it focuses your attention on the monthly payment amount rather
than the important total cost of the car. Simply say, “I am
not a payment buyer.” Or, if you’re pre-approved for a vehicle
loan through your credit union, say, “I’m paying cash for the
car” since the dealer will receive a check on your behalf.
Some salespeople are told to give the customer high vehicle
price figures during initial negotiations—just to test the customer
to see how you will react. By doing this, the salesperson creates
room for the dealership to come down on price, making you feel
like you’ve negotiated a great deal. However, this also takes
more time with back and forth negotiating.
Since you’re a smart and informed consumer, you’ll already know
a fair price for the vehicle based on your research. To save
time, tell the salesperson you’ve done your research and that
you’re willing to pay a fair price for the vehicle and nothing
more.
The salesperson may use a pre-printed “four-square worksheet”
form. This form, as its name indicates, is divided into four
squares: purchase price, trade-in, down payment and monthly
payment. By using this form, the salesperson is able to keep
track of all the figures and view each piece of the deal in
terms of total profit for the dealership. Be aware that the
salesperson will try to work you around the quadrants of the
form. If you won’t come up on your price, the salesperson will
focus on your trade in. If this doesn’t work, they will try
to get more of a down payment. The important thing to remember
is, while the salesperson tries to keep your attention on the
four-square form, stay focused on your target pricing you got
from your research.
Price negotiations can be relatively simple. Tell the salesperson
you know the invoice price they paid for the vehicle, as well
as the cost for options. Tell him/her you have adjusted your
offer for any applicable rebates and incentives. Then, throw
out a figure several hundred dollars less than the fair price
you found from your research (this gives the salesperson room
to bump up your offer). Be prepared for an emotional response.
The salesperson may say your offer is way too low or that your
research is inaccurate. But, you know your offer is fair.
Simply wait for the salesperson to go through their routine
of “checking with their boss” and wait for a counteroffer.
Many salespeople have become so accustomed to customers negotiating
at or below invoice price that they will often welcome a true,
fair offer. Remember, sometimes, moving a vehicle out of a
dealer’s inventory is more important than getting top dollar
for it. And, depending on the time of year you are buying,
you may find the salesperson more receptive than you think.
Be fair with your offer and negotiating—don’t expect the dealer
to sell you the vehicle at a loss. Shoot for a “win-win” deal.
But, at the same time, don’t be persuaded by the salesperson’s
arguments. Be pleasant but firm. And remember, you can always
stand up and walk out if the negotiations aren’t going your
way.
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Before you drive off in your new vehicle, you have one final
important step: signing the necessary purchase and/or loan documents.
This usually occurs in the finance and insurance, or “F &
I” room. The people who work in the F & I room write up
contracts on new vehicles, make sure you are insured, handle
financing and leasing arrangements, and give you temporary registration
for your new vehicle. The F & I person also makes commissions
on extras he/she tries to sell to you such as extended warranties,
rustproofing, roadside assistance, etc.
Two of the most important areas of discussion will concern
Here is a list of legitimate fees you may find on your purchase
contract:
- Destination
charge
- Sales
tax
- License
and registration fees
- Documentation
fee (a reasonable fee is $50)
- Advertising
fee (this fee can be debated, but many dealers maintain
it’s justified and necessary—it’s your call whether
or not to protest it)
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Charges appearing on your contract that you should question:
- Administrative
costs (these are unnecessary)
- Appearance
or protection packages (most of today’s cars have
clearcoat paint protection standard from the factory)
- Dealer
flooring charge (another cost of doing business fee
that is already covered)
- Delivery
and handling (the delivery charge is already handled
by destination charge)
- Extended
warranties (make sure it doesn’t appear unless you
requested it)
- Rustproofing
(it’s unnecessary with today’s new cars and in some
cases can void your warranty)
- Sales
promotion costs (these are unnecessary)
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Before you leave the dealership, carefully inspect your vehicle
to make sure there are no dents or scratches on the exterior.
Also, make sure the interior doesn’t have any flaws. If you
find any problems, ask your salesperson to write up an agreement
to have the service department fix the needed repairs.
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