Which fees get financed
A dealer documentation fee and the cost of registering the car are normally added to the balance, so you pay interest on them for the whole term. GAP insurance and extended warranties are optional, but they are usually financed the same way when you buy them with the car.
Paying a fee upfront instead keeps it out of the loan and saves the interest. Ask the dealer for a breakdown of every charge before you sign.
Worked example
A £28,000 car with a £3,000 deposit, a £599 documentation fee and £350 of title and registration charges means £949 of fees. The amount financed is £25,949.
At 7.5% over 60 months the payment is £519.96, the interest is £5,248.88 and the total cost including the deposit is £34,197.88. The fees are 3.7% of the amount financed.
Fees worth questioning
Documentation fees vary widely between dealers and are sometimes negotiable. GAP insurance is usually cheaper from an insurer than from the dealer, and an extended warranty is only worth it if you plan to keep the car past the manufacturer's cover.
A preparation or admin fee should be explained. If it is not in the written quote, it should not appear at signing.
Inputs for the auto loan fees calculator
Vehicle price
The agreed price of the car before fees.
Deposit or down payment
Cash or trade-in value you pay upfront.
Dealer documentation fee
The dealer's paperwork charge, usually added to the loan.
Title, registration and plates
Government charges to register the car in your name.
GAP insurance
Optional cover for the gap between the loan and the insurer's payout. Enter 0 if not buying it.
Extended warranty or service plan
Optional cover added to the agreement. Enter 0 if not buying it.
Interest rate (nominal, not APR)
The yearly rate before monthly compounding, charged on the amount financed.
Term
How many months you will take to repay the loan.
CALCULATOR QUESTIONS
Auto loan calculator with fees questions
Should I finance the dealer fees or pay them upfront?
Paying them upfront saves the interest. Financing them keeps more cash in your pocket now, but costs more over the term.
Are documentation fees negotiable?
Often, yes. They vary between dealers and are worth asking about before you agree the price.
Is GAP insurance worth financing?
Only if you would buy it anyway. Compare the dealer's price with a standalone policy, and remember that financing it adds interest.
Do fees affect the interest rate?
Not the rate itself, but they increase the amount financed and therefore the total interest you pay.