An administrative fee is a fee that car dealers charge to “administer” a purchase or lease. The amount can vary, but most dealers charge this fee. Ask your dealer what the
fee is for before you buy.
After Tax Items
After-tax items are fees a car dealer must pay when selling a vehicle. These items include provincial licensing and registration fees. Dealers usually have to pay a small
service fee to register a vehicle lien with the province. Dealers pass this fee on to the buyer.
Buyback (residual value)
Buybacks are determined by the leaser, in most cases the manufacturer, and are usually expressed as a percentage of the MSRP. While consumers negotiate a different selling
price for the same vehicle, the buybacks of their leases will remain the same as long as the length of the lease and the mileage allowance are the same. Always confirm
the exact amount of the buyback with the dealer. In order to calculate the lease correctly you need to have the exact amount of the buyback.
Dealer-added Options and Services
Dealer added options and services include accessories for your vehicle (e.g., roof racks, bug deflectors) and special services (e.g., rust proofing, extended warranties).
Freight and Pre-delivery Inspection (PDI)
Freight is the charge for transporting a vehicle to the car dealership. Pre-delivery inspection is a charge for the dealer to do a mechanical check of the vehicle before a
sale. These charges are included in the manufacturer’s suggested retail price of the vehicle.
Manufacturer’s Suggested Retail Price (MSRP)
The manufacturer’s suggested retail price, or “sticker price,” is the price set by the car’s manufacturer. It includes the base price, factory options, freight and pre-delivery
inspection charges, and the federal tax on vehicles with air conditioning.
Personal Property and Security Act (PPSA)
The Personal Property and Security Act lets provincial governments charge a small annual fee to register a loan or a lease. Some companies pass this fee on to the buyer as a
one-time service charge. The fee is called Registre des droits personnels et réels mobiliers (RDPRM) in the province of Quebec.
Car dealers have to pay provincial charges when they sell a vehicle. For example, in Ontario, a car sale can include a fuel tax, a tire fee and a fee for the provincial
regulator. Provincial charges are taxable and are not negotiable.
In most provinces, a provincial sales tax is added to the purchase price of a vehicle, or to the monthly payment for a lease. A trade-in reduces your taxable amount, but a
down payment does not.