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Purchasing a new car – be aware of the hidden costs


Every one loves to own a car or SUV especially if it is going to be a new one. The excitement is barely concealed yet it is also imperative to think of the concealed costs and charges when purchasing a new car or SUV. The price tag that you find on the vehicle is only a part of the actual cost that you are going to pay for the car. There are other fees which are not required or necessary like Dealer Prep and Dealer Holdback Allowance; these are charges which are additionally included by dealers to make a big profit on the sale. And there are other fees like the Destination Charges which are justifiable and part of the purchasing costs for a new car or SUV.

The Dealer Prep fees are nothing but the profit for the dealers and can go from a couple to several hundred dollars. Dealer Prep charges are taken care of the car or SUV manufacturer and are inclusive on the price tag or the MSRP. The other options like Dealer installed options, which includes the paint and/or the fabric sealant and window tinting, are additional charges when purchasing a new car. The Dealer Holdback Allowance is a hidden 2% to 3% fee mostly added to the price tag which can help the dealer sell the new vehicle at a price below the invoice cost and yet make a profit out of it. Additional Dealer Markup normally appears next to the MSRP and is a fake fee created by the dealer as a defense for negotiation so that the dealer can make a better profit from the sale.

There are a few other foreign car manufacturers who charge for features installed at the port like rubberized undercoating and these charges are usually called Port Prep or Port Installed Option Fees; these fees can go up to $600 too, depending on the car manufacturer. The other charges are Destination Charges which the car or SUV manufacturer charge for transporting the vehicle from the factory or port and is around several hundred dollars. Marketing or Advertising Fees are added by the dealer to the actual cost of a new and can run high as $1,000; nevertheless when you purchase online the advertising fees get eliminated.

The other concealed charge in the list is financial fees and it varies, adding a huge chunk of an amount to the monthly payments of a new car. Many car or SUV manufacturers offer 0% financing benefits. The banks charge a certain amount as interest though. Along with this is the sales tax which is generally between 2% to 7.25% and depends on the state; this also adds a huge amount to the already escalated car rates. There are car or SUV vehicle documentation charges which are levied by dealers to create and file the title, license and to register the paperwork and if you can file the required paperwork by yourself, you can save yourself some serious money.

The other charges to think of are car or SUV insurance that normally ascends for a new car and maintenance amount that changes according to the model and make of the car or SUV vehicle. Fuel charges also burn a hole in the pocket as it is not a one-time charge and if you have purchased a car or SUV that requires premium fuel and gives low-gas mileage – then god forbid!

The best thing about purchasing a new car or SUV is the extended warranty which could also lead to an expense of a few dollars more, however; there are a valuable investment in the long run.

Here is the list of hidden Costs when purchasing a New Car or SUV:

Manufacturer and Dealer Fees.


License and Registration Charges.

Car Insurance.

Extended Warranty.

Sales Tax.

Fuel Costs.

Hidden charges may be tough to decode yet purchasing a new car or SUV does not have to be complicated or daunting. If you take some time to check for online references and do a little research it is simple and fast to get the genuine cost of a new car or SUV at the finest potential price with no hassles or harassments.

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  • This is really great topic and I really like to read it. I think disadvantages are more than advantages. I think most of time your old SUV parts prices are hike year by year.

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