Dealer Admin Fees Explained

Buying a car should be exciting, but sometimes surprise charges can make it feel a bit confusing. One of the most common extras you might see is a 'dealer admin fee'. It can feel like a bit of a curveball when you’ve already found a car you love and agreed on a price.

Let's break down what these fees are, why some dealers charge them, and what you need to know before you sign on the dotted line.

What is a dealer admin fee?

A dealer admin fee is an extra charge some dealerships add to the screen price of a car. They might also call it a ‘processing fee’ or ‘documentation fee’. The dealership will say this fee covers the cost of handling the paperwork and getting the car ready for you.

While most dealers don't add these extra costs, a fair few still do. The fee can range from a small amount to over £500, which can make a big difference to your budget. That's why it’s always a good idea to ask for a full breakdown of all costs before you agree to buy. No one likes an unwelcome surprise when it comes to money.

What does the law say about admin fees?

The law is on your side here. The Consumer Protection from Unfair Trading Regulations 2008 states that dealers must show the total price of a car, including any compulsory admin fees. If they don't, it’s considered a ‘misleading action’. The price you see advertised should be the price you pay to drive the car away.

Many dealers are also signed up to The Motor Ombudsman's code of practice. This code makes it clear that all communication, including adverts, should not be misleading. It says the price you see should be the full 'on the road' price. So, adding a hidden admin fee at the last minute goes against the spirit of this agreement.

To be fair, many dealers are upfront about these charges and might even give you the option to opt-out. Some fees also bundle in helpful extras like temporary insurance or help with sorting your car tax.

Should you pay dealer admin fees?

This is the big question. While nobody loves paying extra fees, sometimes they can be justified. It’s important to understand what you should get as standard and what might be a reasonable extra cost.

As a starting point, you should expect certain things to be included in the car's price. A vehicle history check (like an HPI check) and a new MOT or service if one is due should really be standard. The Motor Ombudsman’s code says all used cars must have a pre-sales inspection before being sold, so you're right to expect the car to be in good shape.

Other things might be genuinely useful. If you want to drive the car home straight away, short-term insurance can be handy, but you might find a better deal by arranging your own policy in advance. An aftermarket warranty can also offer peace of mind if the car is no longer covered by the manufacturer's warranty.

Ultimately, a good dealer will be completely transparent about any additional costs. They should explain what the admin fee covers and why they charge it.

And remember, you can always try to negotiate. If you question the fee, the dealer might be willing to remove it, especially if it means securing the sale. It never hurts to ask.

Ready for the next step?

Now that you're clued up on dealer admin fees, you're in a much better position to navigate the car-buying journey with confidence.

Find your next car with Cazoo today.