The hidden costs of buying a new car

Buying a new car is one of the biggest financial decisions you can make in your lifetime. As a future driver, you’ll want nothing short of perfection and the very best for what your money can buy, naturally—but there are some hidden costs to buying a new car that almost always come to the surface once you get knee-deep into the process.

It’s worth paying attention to the details to avoid the hidden costs of buying a new car, such as:

  • Choosing the best dealership
  • Your preferred make and model
  • Trim levels
  • Winter tires (yes, they help!)
  • Car accessories

Let’s take a closer look at those.

How to vet Ontario car dealerships

Buying a car at a dealership is about so much more than what the car itself is worth. This is mostly because of the new car dealer fees, which are tacked on to the car’s base retail price.

The car’s retail price is suggested to the dealership by the car’s manufacturer (that’s what MSRP stands for: manufacturer’s suggested retail price). The dealership can alter this price to a different amount if they wish, which is why you can walk into one looking for the same car and find it with a different price. Sales tax and all of the additional fees are not included there.

Luckily, dealerships in Canada have less space to try and spring hidden costs of buying a new car on you, thanks to the Ontario Motor Vehicle Industry Council and the Motor Vehicle Dealers Act. Every salesperson working in every Ontario car dealership must complete the OMVIC course and receive a certificate to ensure the buyers be made aware of fees associated with buying cars.

Check dealerships for OMVIC certification before you visit them!

What should I expect in dealership charges?

With this in mind, any car’s advertised price needs to be transparent, listing any and all fees the dealership plans to collect. This is also known as all-in pricing.  According to the OMVIC , here are the fees that are non-negotiable, but must be clearly stated in the car’s advertised price:

  • Government Levies: This includes the regulatory fees as well as air and tire taxes.
  • Freight Delivery Fee: This is a fee set by the car’s manufacturer. A freight delivery charge for a new car covers the cost of having the vehicle transported from the factory to the car dealership.
  • Pre-Delivery Inspection Fees: This is another fee set by the car’s manufacturer. Before the car can be delivered to the dealership, it needs to be thoroughly inspected and filled with gas.

Keep in mind that these are not the only fees you might face at the dealership, but they’re the most substantial ones. Any other fees should still be listed under the car’s advertised price. You might also see a few administration fees such as:

  • Title fee
  • Advertising fee
  • Emissions testing fee
  • Documentation fee
  • Compliance fee

Are there any negotiable fees?

As a matter of fact, there are a  handful! You might not see them listed in the car’s advertised price, but you will find them listed in the invoice.

That doesn’t necessarily make them hidden fees when you’re buying a new car. Salespeople are obligated to tell you about them, what they’re for, and how much they cost before you finalize the transaction, which is legal. Typically, license fees and the harmonized sales tax (HST) will not be a part of the price. The licensing fee is for your car’s license plates and registration, so the dealership can’t affect it.

The prices you can negotiate are mostly related to administration fees, like financial documentation. Sometimes this fee will also be related to the vehicle’s features. As these are optional features, you have room to negotiate a price that covers exactly what you need.

You also have the power to negotiate or walk away from extended warranties.

Any other hidden costs of buying a new car?

Finally, when you’re buying a new car, you’ll want to get it insured. It’s not hidden, since every car needs to be insured by law, but it’s easy to forget about it when we get caught up in snazzy new car features.

Also keep in mind that the type of car you select will affect your monthly premium. For example, luxury cars will yield a higher monthly premium than a family sedan. Dealerships will also try to sell you newer cars because they make more money on those extra features, but it’s entirely up to you if you want them.

There are some pretty useful things on offer, like built-in theft protection, but you know your finances better than anyone else. The best way to minimize the hidden costs of buying a new car means separating the features you’ll actually use from the ones you won’t.


Need an insurance policy to go with your sweet new ride? Come check us out! The price you’re quoted is the price you pay.

Buying a new car is one of the biggest financial decisions you can make in your lifetime. As a future driver, you’ll want nothing short of perfection and the very best for what your money can buy, naturally—but there some hidden costs to buying a new car that almost always come to the surface once you get knee-deep into the process.

But it’s worth paying attention to the details to avoid the hidden costs of buying a new car, such as:

  • Choosing the best dealership
  • Your preferred make and model
  • Trim levels
  • Winter tires (yes, they help)
  • Car accessories

Let’s take a closer look at those.

How to vet Ontario car dealerships

Buying a car at a dealership is about so much more than what the car itself is worth. This is mostly because of the new car dealer fees, which are tacked on to the car’s base retail price.

The car’s retail price is suggested to the dealership by the car’s manufacturer (that’s what MSRP stands for, after all: manufacturer’s suggested retail price). The dealership can alter this price to a different amount if they wish, which is why you can walk into a few dealerships looking for the same car and find it with a different price. Sales tax and all of the additional fees are not included there.

Luckily, dealerships in Canada have less space to try and spring hidden costs of buying a new car on you, thanks to the Ontario Motor Vehicle Industry Council and the Motor Vehicle Dealers Act. Every salesperson working in every Ontario car dealership must complete the OMVIC course and receive a certificate to ensure the buyers be made aware of fees associated with buying cars.

Check dealerships for OMVIC certification before you visit them!

What should I expect in dealership charges?

With this in mind, any car’s advertised price needs to be transparent, listing any and all fees the dealership plans to collect. This is also known as all-in pricing. According to the OMVIC, here are the fees that are non-negotiable, but must be clearly stated in the car’s advertised price:

  • Government Levies: This includes the regulatory fees as well as air and tire taxes.

  • Freight Delivery Fee: This is a fee set by the car’s manufacturer. A freight delivery charge for a new car covers the cost of having the vehicle transported from the factory to the car dealership.
  • Pre-Delivery Inspection Fees: This is another fee set by the car’s manufacturer. Before the car can be delivered to the dealership, it needs to be thoroughly inspected and filled with gas.

Keep in mind that these are not the only fees you might face at the dealership, but they’re the most substantial ones. Any other fees should still be listed under the car’s advertised price. You might also see a few administration fees such as:

  • Title fee
  • Advertising fee
  • Emissions testing fee
  • Documentation fee
  • Compliance fee

Are there any negotiable fees?

As a matter of fact, there are a handful!You might not see them listed in the car’s advertised price, but you will find them listed in the invoice.

That doesn’t necessarily make them hidden fees when you’re buying a new car. Salespeople are obligated to tell you about them, what they’re for, and how much they cost before the transaction, which is legal. Typically, license fees and the harmonized sales tax (HST) will not be a part of the price. The licensing fee is for your car’s license plates and registration, so the dealership can’t affect it.

The prices you can negotiate are mostly related to administration fees, like financial documentation. Sometimes, this fee will also be related to the vehicle’s features. As these are optional features, you have room to negotiate a price that covers exactly what you need.

You also have the power to negotiate or walk away from extended warranties.

Any other hidden costs of buying a new car?

Finally, when you’re buying a new car, you’ll want to get it insured. It’s not hidden, since every car needs to be insured by law, but it’s easy to forget about it when we get caught up in snazzy new car features.

Also keep in mind that the type of car you select will affect your monthly premium. For example, luxury cars will yield a higher monthly premium than a family sedan. Dealerships will also try to sell you newer cars because they make more money on those extra features, but it’s entirely up to you if you want them.

There are some pretty useful things on the offer, like built-in theft protection, but you know your finances better than anyone else. The best way to minimize the hidden costs of buying a new car means separating the features you’ll actually use from the ones you won’t.


Need an insurance policy to go with your sweet new ride? Come check us out! The price you’re quoted is the price you pay.

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