Household Auto Loans: Costs Associated with Buying a New Vehicle

A Credit Article Contributed by Brandie King

Household Auto Loans: Costs Associated with Buying a New Vehicle

Before going shopping for a new vehicle and trying to get a household auto loan to finance that new vehicle, you need to know some of the costs associated with purchasing a new vehicle and what those costs are for with regards to the household auto loan.

There are some of the costs you can avoid and some of them that you just have to live with. When obtaining a household auto loan there are also other costs that you may come across. The following article will help you to learn about some of the associated costs before you go out and try to get a household auto loan.

Household Auto Loan: Costs You Can't Avoid When Buying a New Vehicle

In all likelihood you will not be able to avoid paying for the the following costs.

- Sales Tax: What you are charged for sales tax will all depend on what state you live in.

- Licensing and Registration Fees: Your state's Department of Motor Vehicles (DMV) can tell you what the proper amount for these fees are.

- Destination Charge: You are usually charged $400 to $450 for a destination charge.

- Documentation Fee: A reasonable amount for this fee is $50.

- Advertising Fee: Dealerships have to help pay for regional television ads. They pass the cost of that on to the consumer in the form of an Advertising Fee.

- Emission Fees: You will normally be charged around $100 for the Emission Fees.

Household Auto Loan: Costs You Can or Should Avoid When Buying a New Vehicle

There are some costs that you can avoid and that you should never pay for.

- Extended Warranties

- Dealer Prep Fee: You shouldn't pay the dealer prep fee because the dealer is already getting reimbursed by the factory for preparing the vehicle for sale.

- Credit Insurance: If you have life insurance you do not need to purchase the Credit Insurance, which pays off the vehicle if you die, offered by the dealer.

- Delivery and Handling Charges (D&H;)

- Fabric Coating: Considering that you can do the same thing with a bottle of Scotch Guard, you shouldn't pay for this service.

- Teflon Coating: Clear coat paint is used on vehicles today, so don't waste your money on paying for Teflon Coating.

- Rust Proofing: This is a service that is no longer needed and can actually harm your vehicle.

Household Auto Loan: Additional Fees and Costs You May Come Across at the Dealership

- Excessive Mileage: If you are leasing your vehicle and you go over the per-year mileage limit specified in your lease agreement you will be charged this fee.

- Excessive Wear and Tear: You will be charged this fee if there is damage to the vehicle above the normal amount when you return it at the end of your lease.

- GAP (Guaranteed Auto Protection) Insurance: If your vehicle is lost or stolen GAP Insurance will pay the difference between what you get from your insurance company and what you still owe on the vehicle.