When buying a car, it’s easy to get caught up in the excitement and overlook the hidden costs. Dealerships are notorious for slippery tactics, adding on fees and charges that can inflate the final price significantly. Understanding these tricks is crucial to ensure you’re getting the best deal and not being taken for a ride.

With the rise of online car shopping, transparency in pricing has become more important than ever. But many dealerships still play games with the “out-the-door” price. Here are ten tricks that dealerships use to inflate the final price, and how to avoid falling for them.

1. Destination Charge

A destination charge is a fee that the dealership charges to cover the cost of transporting the car from the manufacturer to the dealership. While this may seem like a legitimate cost, some dealerships inflate this charge or include it when it’s already been covered in the purchase price.

It’s essential to question the destination charge, especially when buying a new car. You can compare the dealership’s charge to the manufacturer’s listed destination fee to ensure you’re not being overcharged.

2. Dealer Preparation Fee

Some dealerships charge a dealer preparation fee for getting the car ready for sale, including cleaning and inspecting the car. However, this is often a redundant fee as the cost of preparing the car for sale is typically included in the car’s price.

Given the increased scrutiny on dealership pricing, the dealer preparation fee is a cost you should question. Make sure you understand exactly what the fee covers and if it’s necessary.

3. Documentation Fee

The documentation fee, or “doc fee,” is what the dealership charges for preparing and filing the sales contract and other paperwork. In many cases, this fee is inflated beyond what would be considered reasonable.

With the advent of digital transactions, the actual cost of documentation has decreased, making this an area where dealerships may try to pad their profits. Always inquire about the doc fee and negotiate it down if it seems excessive.

4. Advertising Fee

An advertising fee is a charge that some dealerships include in the car purchase agreement to cover the cost of advertising the car. This is a cost that should be borne by the dealer, not the buyer.

In today’s digital age, with consumers having access to more information than ever before, the advertising fee is a charge that you should challenge. The dealer should be responsible for the cost of advertising their products.

5. Dealer Markup

Dealer markup is an additional charge that some dealerships add to the price of a car, over and above the manufacturer’s suggested retail price (MSRP). This is a way for the dealership to increase their profit margin.

With the rise of online car shopping, consumers are more informed than ever before. Always question a dealer markup and ask for a breakdown of what it includes.

6. Extended Warranties

Extended warranties are often presented as a security measure, covering potential repair costs after the manufacturer’s warranty expires. While they can provide peace of mind, they can also significantly inflate the cost of the car.

As cars become more reliable and long-lasting, the necessity of extended warranties is increasingly questionable. Be sure to understand what the warranty covers and compare it to the cost of potential repairs.

7. GAP Insurance

GAP insurance covers the difference between what your car is worth and what you owe on your auto loan if your car is totaled or stolen. While this can be valuable for some buyers, it’s often not necessary and can inflate the final car price.

With more consumers shopping for car insurance online, it’s important to understand what GAP insurance covers and compare prices before deciding to add it to your car purchase.

8. Dealer-Installed Accessories

Dealer-installed accessories, such as paint protection, fabric protection, and VIN etching, can increase the final price of the car. While these can add value, they’re often overpriced and unnecessary.

With consumers increasingly customizing their cars post-purchase, it’s worth considering whether these dealer-installed accessories are necessary or if you can get them elsewhere for less.

9. Financing Markup

Dealerships often offer financing options to buyers. However, they may mark up the interest rate offered by the lender to increase their profits. This can significantly inflate the final price of the car over the term of the loan.

With the rise of online lending, it’s more important than ever to shop around for the best interest rates and terms before accepting dealership financing.

10. Trade-In Underpayment

When trading in a car, dealerships often offer less than the car’s actual value, thereby increasing their profit margin. This can reduce the discount you’re getting on your new car.

With more online resources available to determine the value of used cars, it’s crucial to know the value of your trade-in before negotiating with the dealership.