Understanding Car Purchase Costs

The video tutorial explains the various costs associated with buying a new car, beyond the manufacturer's suggested retail price (MSRP). It details the different fees such as sales tax, registration, destination, and documentation fees, and highlights which fees are negotiable. An example is provided to calculate the total cost of a car, including all fees, emphasizing the importance of negotiating fees to reduce the overall expense.

What is the sticker price of a car also known as?

• Negotiated price

• Final sale price

• Manufacturer's suggested retail price

• Dealer's price

Which of the following is NOT a fee typically associated with buying a car?

• Destination fee

• Home insurance

• Registration fee

• Sales tax

What does the destination fee cover?

• Cost of delivering the vehicle to the dealer

• Cost of registering the car

• Cost of preparing the car for sale

• Cost of advertising the car

Which of the following is a fee for paperwork done by the dealer?

• Registration fee

• Destination fee

• Add-on fee

• Documentation fee

Which fee is often negotiable when buying a car?

• Add-on fee

• Destination fee

• Registration fee

• Federal sales tax

What is the purpose of extended warranties and maintenance plans?

• To increase the car's resale value

• To help cover some of the cost of caring for the car

• To reduce the car's purchase price

• To cover the cost of car registration

In the example, what is the federal sales tax percentage applied to the car price?

• 6.5%

• 1.25%

• 5.6%

• 0.5%

How much is the city tax in the example provided?

• $356.25

• $1,596

• $600

• $42.50

What is the total cost of the car including all fees in the example?

• $32,000

• $28,500

• $30,096.75

• $31,000

Why is it important to negotiate fees when buying a car?

• To reduce the overall cost of the car

• To avoid paying taxes

• To increase the car's resale value

• To get a better warranty