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Ten hidden new car costs

The cost of a new car may not be as transparent as it seems. There are many small and large fees that dealers won't disclose upfront. 

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    2015 Jeep Grand Cherokee are exhibited on a car dealership in New Jersey, in this July 24, 2015, file photo. There can be many hidden costs of buying a new car.
    Eduardo Munoz/Reuters/File
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Car dealers are experts at extracting as much money as possible from buyers. Of course, the dealer will try to get the highest price they can on the cars they sell, but there are many other sneaky costs involved. Here are some of these hidden new car costs and how to avoid them.

1. Tax, Title, and License

You may think you've finished negotiating the price down to a level you can afford, but wait — there's more! When you see the final cost for your vehicle, you will be hit with tax, title, and license fees on top of the price you negotiated. This can add up to thousands of dollars on your new car.

Save by keeping these costs in mind when selecting a vehicle (less expensive vehicles have lower tax and title fees). Here is a calculator you can use to estimate tax, title, and license costs in your state. Negotiate the vehicle price considering the full cost including these fees, so you can end up closer to the total you had in mind.

2. Splash Guards and Bug Shields

Since you are spending so much to buy a new car, why not spend a few hundred dollars more to protect it? The dealer may offer to install splash guards and bug shields to help protect your new vehicle from damage. These items are very profitable for the dealer.

Save by having accessories installed elsewhere for much less if you decide you still want them.

3. Extended Warranty Coverage

New cars come with warranty coverage, but you can extend the length of the warranty or add additional items to be covered for an additional price. Are extended warranties a good deal? Not according to Consumer Reports. On average, you will pay more for the extended warranty coverage than you will gain from having it.

Save time and money by skipping the extended warranty coverage offered on your new car.

4. Oil Change Packages

Your dealer may offer you a chance to pre-pay for a number of oil changes. This special offer may make the cost of the dealer shop competitive with your regular shop. This is a good deal only if the dealer is in a convenient location, and only if you stick to just getting the discount oil changes. Service is typically more expensive at dealer shops.

Only buy the oil change package if the dealership is in a convenient location. Otherwise, you will spend more time and money getting there, or may not get around to using it at all.

5. Gap Insurance

If you are financing your vehicle, you may be offered gap insurance from your dealer. This protects you from the depreciation of your vehicle if it is involved in an accident and is a total loss. Your comprehensive and collision coverage will only pay for the current value of the vehicle, which can be less than amount you would need to pay off your entire car loan balance. Buying gap coverage at the dealer is typically much more expensive than adding this coverage with your insurance agency.

Save on gap insurance by purchasing this from your insurance agent instead of the dealer.

6. Rustproofing

Unlike the bad old days, new cars now come with efficient rustproofing. There is no need to add anything else to improve the rust protection of your vehicle.

Save hundreds of dollars by skipping the rustproofing offered at the dealer.

7. Fabric Protection

You may be offered impressive-sounding fabric treatment to protect your car's interior from stains. Modern car interior materials are already stain-resistant if you wipe up spills promptly, so there's really no need for this add-on.

If you have kids or pets and are especially worried about protecting your fabric, get a can of Scotchguard and apply it yourself. You'll save tons of money.

8. Paint Protection

It is a good idea to wash and wax your new car regularly, but it is not necessary to pay a lot of money for paint protection. Modern auto finishes do not require a paint sealant, and applying anything to the paint of a brand new car is typically not recommended for a few months to allow the paint to fully cure.

Skip the paint protection and get some synthetic car wax instead for much less.

9. VIN Etching

You will want to do everything you can to protect your new car from being stolen, and your dealer may offer to help with this by suggesting VIN etching. Etching your vehicle's VIN number in the windshield can be useful as a deterrent to theft, but having this done at the dealership may cost hundreds of dollars versus doing it yourself with a kit for less than $50.

If you have never heard of anyone getting a car stolen where you live or work, you may not need to bother with VIN etching.

10. Higher Interest Rates With Dealer Financing

If you sign up for financing from the dealer, you may be paying a higher interest rate than if you secure financing directly from a bank. Some dealers will give you the best rate they can find for you, but others will mark up the interest rate and keep the difference.

Shop for financing at banks and credit unions to find the best rates before you go car shopping and avoid giving extra money to the dealer.

This article first appeared at Wise Bread.

The Christian Science Monitor has assembled a diverse group of the best personal finance bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link in the blog description box above.

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