What Are the Common Fees Associated with New Car Loans?

While availing of new car loans, there are a few common fees associated with the process, such as,

• Loan Origination Fee- This fee covers the lending institution's work processing the loan application, ensuring all required paperwork is completed correctly and filed.
• Document or Processing Fee- Often charged by dealers, this fee handles the cost of collecting, reviewing, and organising all necessary paperwork to finalise the sale. It covers all the administrative efforts to get everything in order.
• Title and Registration Fees- These are government-mandated charges needed to transfer ownership and register the new vehicle legally. They ensure the car is officially recorded under the new owner’s name.
• Dealer Preparation Fee- Some dealers include a fee for preparing the car for delivery. This might involve cleaning, detailing, or performing final checks.
• Administrative Fees and GAP Insurance- Lenders might impose additional administrative fees for managing the loan or require Guaranteed Asset Protection (GAP) insurance, which covers the difference between the car’s depreciated value and the remaining loan balance if the vehicle is totalled.