Check the numbers

Whether you’re buying or leasing, you should carefully check all the numbers on the agreement. Use the calculator on your mobile phone or bring one with you (if necessary, borrow one from the salesperson) to total them up yourself. Make sure that the contract shows the agreed-upon purchase price or, if leasing, the capitalized cost, and that your cash down payment, trade-in allowance, and any rebate have been subtracted from that amount.

If you are financing the vehicle through the dealer, make sure the right interest rate (or “money factor” in the case of a lease) was used to calculate your monthly payment.

As you check the agreement, you’ll likely encounter various additional charges. In addition to legitimate ones, there may be others that are questionable or entirely unnecessary. While you go through the contract, you can refer to “Closing fees: fair and foul” (facing page). Remember, unless you pay fees and taxes up front, they’re added to the total package and you will pay interest on them.

Here’s a rundown of some of the major charges you’ll encounter:

Destination charge. This fee covers the cost to deliver the vehicle from the factory to the dealership and is shown on the vehicle’s window sticker. It is set by the automaker and is typically the same for all models within a particular brand.

Yes, you have to pay this charge. It’s a straight pass-along cost. Some dealers, however, have been known to sneak in an additional delivery fee, itemized on a second window sticker pasted near the official one. If you see additional “pre-delivery inspection,” “delivery,” “destination,” or “dealer prep” charges, you should refuse to pay them.

Title and registration fee. The dealership usually has arrangements with your state Department of Motor Vehicles (DMV) for title and registration documents, and may issue you temporary tags or permanent license plates as well. You’ll have to pay those fees, too, which are fixed by your state.

One thing to look out for: If you are transferring plates from another car, rather than applying for new plates, the registration fee is generally a bit lower. Make sure you’re not paying for new plates if you’re not getting them. You can check the fees by calling your local DMV or using its website.

Documentation fee. Sometimes called a “doc fee” or “conveyance fee,” this is supposed to cover the dealer’s cost for processing the paperwork for the purchase, title, and registration. Some states strictly limit this fee, but most do not. Where it is regulated, it’s often moderate: $100 or less in California, Louisiana, Minnesota, and New York and $150 in Texas and Washington. In a no-limit state such as Connecticut, where Consumer Reports’ staff buys most of our cars, the fee typically runs from $199 to $300, but we’ve seen it as high as $500. It’s generally preprinted on the sales contract.

We have found it impossible to get our local dealers to reduce or eliminate this fee. Instead, we make it part of the price negotiation: Try to get the dealer to reduce the price of the car by a like amount, and let the fee stay on the purchase agreement. As a fallback negotiating tactic, ask that some accessory such as floor mats, wheel locks, or a cargo organizer be thrown in free of charge.

State sales tax. If you’re buying a vehicle in the state in which you live, you’ll have to pay the sales tax. But states vary in whether they charge tax on the whole amount or just on the purchase price less your trade-in. If you’re buying a car out of state, you’ll pay sales tax when you register the car in your home state. Most dealers can handle registrations in other states, too.

But if you intend to relocate soon after your purchase or lease, or if you’re buying the vehicle for somebody else who lives in another state, you’ll probably have to register it temporarily where you bought it, then reregister it in the new state of residence before the temporary registration expires, usually within 30 days.

You can claim a refund for the first state’s sales tax by submitting proof that you’ve reregistered the vehicle, and paid tax, in the state where permanent tags are issued.

Advertising fee. Manufacturers charge their dealerships for a brand’s national advertising, and they include that charge in the dealer-invoice price. Regional dealer associations may also levy assessments to cover local newspaper, radio, and television ads, and it has become increasingly common for dealers to pass along a few hun­dred dollars of that expense to each new car sale or lease.

This charge should be disclosed and agreed to before you find it on the closing paperwork. Some dealers list it on a separate sticker posted in the vehicle’s window. If you’re hit with an advertising charge from out of the blue, challenge it and ask to have it removed.