Whether you're buying or selling a car in Houston, one of the most frustrating parts of the process is dealing with hidden fees. These unexpected costs can turn what seemed like a great deal into an expensive lesson. From dealership charges to unexpected costs in private sales, knowing how to identify and avoid hidden fees is key to protecting your wallet and making a smart decision.

Let’s break down the most common hidden fees you might encounter—on both the buying and selling side—and how to steer clear of them.

Understanding Hidden Fees When Buying a Car

When purchasing a car, especially from a dealership, the advertised price is rarely the final price. Dealerships often tack on additional charges during the paperwork stage. Here are some common fees to watch out for:

1. Dealer Prep Fees

This fee is often listed as a charge for preparing the car for sale—cleaning it, filling up fluids, and doing a basic inspection. However, many dealers include this fee even though these tasks are part of the dealership's responsibility. Always ask if this is negotiable or already included in the price.

2. Destination Charges

Even on used cars, some dealerships include a “destination fee” originally applied when the vehicle was first shipped from the manufacturer. This is reasonable for new cars, but not for pre-owned ones. If it appears on a used car invoice, question it.

3. Documentation Fees (Doc Fees)

This is one of the most common hidden charges. It’s a fee dealerships charge to process your paperwork. While Texas allows dealers to charge a documentation fee, the average range is around $150 to $300. If the doc fee is unusually high, try negotiating or request an itemized breakdown.

4. VIN Etching Fees

Some dealers automatically add VIN (Vehicle Identification Number) etching for security purposes and charge a few hundred dollars for it. However, this is optional, and you can usually do it yourself or decline the service entirely.

5. Fabric Protection, Paint Sealants, and Add-ons

Many Houston dealerships pre-install extras like fabric protection, nitrogen in tires, wheel locks, or paint protection coatings. These add-ons may be included without your request and show up as separate charges. Ask upfront for a clear list of what’s included and decline any options you don’t want.

6. Extended Warranties or Service Contracts

While not necessarily a scam, extended warranties are often presented as essential add-ons during the buying process. Make sure to evaluate whether the cost is worth it and whether the warranty is backed by a reliable provider.