These US States Have The Highest Dealer Fees

Buying a car from a dealership is exciting. But it also can be quite a daunting task that requires careful consideration of several factors before you head off to see the car that's most appealing to you. Among the most unsettling things you may encounter are the price lies dealers tend to tell. Often they agree to sell you a vehicle at one price, only to end up charging a higher final price when it's time to sign on the dotted line. In most cases, these unexpected fees can add up to 8-10% of the car's purchase price, according to Lending Tree.

The difference is usually due to additional expenses such as dealer fees, which can catch you off-guard and significantly affect your budget if you're not prepared. They can include title and registration fees; documentation fees; advertising fees; warranties; maintenance plans; and even a charge for etching the vehicle identification number into the windshield. You'll also usually expect to pay sales tax, of course, as most states charge it.

These dealer fees vary widely depending on the state you're in, per World Population Review, ranging from a modest $315 to a substantial $6,369. However, it's possible to negotiate some of those fees down and secure a better deal. We strongly recommend you do so, because while some dealer fees are legit, others are totally fake. 

While Louisiana's dealer fees are the highest for new cars at $6,369, its used-car costs stand at $4,489. That's slightly lower than the fees buyers pay for used models in Colorado, which has the highest used-car fees at $4,498. Coloradans also spend more on new car costs than their counterparts in all other states not named Louisiana, paying $5,890. 

In Arizona, dealers charge an average of $5,791 in new-car fees while imposing used-car fees as high as $4,399. Buying a new car in Alabama can add $5,490 to the advertised purchase price, with used-car fees typically $4,123. Arkansas rounds out the top five states with the biggest new-car expenses, as fees can cost $5,045. However, at $3,522, its used-car fees are hundreds of dollars less than buyers in Michigan are charged. Dealers in the Wolverine State demand an extra $4,156 in used-car fees (new-car fees are also steep at $4,902). 

At the bottom of the spectrum, dealers in Alaska charge the least in new-car fees at $315, while buyers in Oregon and Montana pay $353 and $537, respectively. Used-car fees also reflect this affordability, as dealers in all three states charge similar amounts for used models. The fees are so low in these states because they have no sales tax and the other charges are typically on the lower side. For example, in Alaska, dealerships often charge $115 to cover the cost of registering the vehicle with the Department of Motor Vehicles (DMV) and a $200 document fee. And Alaska has no sales tax. 

Buying a car involves paperwork, which the dealership often handles on customers' behalf to make the process easier. In return, they charge customers a fee for this service. This fee can range from $85 to $999, according to CarEdge. The average doc fee in Florida is the highest, at $999, followed by Virginia ($799), Colorado ($699), and North Carolina ($695).

California dealers charge the lowest documentation fee, averaging $85 (California dealers who do not have a contract with the DMV to be private industry partners are required to cap their doc fees at $70). However, the California fees may not be low for much longer, as a bill has passed both houses of the State Legislature that would let car dealers charge as much as $260 in doc fees until Jan. 1, 2031. The measure still would need the signature of Gov. Gavin Newsom to become law.

Also, keep in mind that there are many states that don't have any limits on doc fees, so the amount can vary widely in such states. One example is this ridiculous quote from a New Jersey dealership, which charged $899 in documentation fees. That's a whopping $204 above the typical maximum of $695 cited by CarEdge. Then again, dealers often have room for negotiation, so you should generally be able to negotiate down document fees to avoid topping out your budget.