Buying a Vehicle | What Am I Paying For?

When Buying a Vehicle, What Am I Paying For?

We know you’ve been there. You walk on to the lot, or look at cars on the internet and see the prices. This can be one of the most intimidating parts of buying a vehicle, and often it’s exactly the part many people are shopping for. For some, it’s simply about how much it is and whether or not they can afford it. Even if other factors are your priority, chances are price is going to come up in the conversation at some point, right? But where does that number (or usually, those numbers) come from? In this article, we’ll break down the numbers for you and take the confusion out of shopping for a new or used vehicle, giving you peace-of-mind when it comes to working with us here at Gross Motors!

What Am I Paying For?
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The Manufacturer’s Suggested Retail Price, or MSRP, is the bottom-line price on the Monroney sticker that comes from the factory. Also referred to as the sticker price, this number includes all standard and optional equipment that comes on that particular vehicle. Because the sticker comes on the vehicle from the factory, it will have the exact same price on it no matter what dealership the vehicle is sitting in, provided all the equipment on the vehicle is the same. In other words, two identical vehicles, one in California and one in Wisconsin, will have the exact same MSRP or sticker price.


The automotive industry is very competitive, and for that reason manufacturers offer certain incentives to make buying a new vehicle more attractive to consumers. Rebates come in many different forms, but they all boil down to one thing: a discount for you, the customer. Some rebates apply to every person that would purchase that particular vehicle, while others are for customers who meet certain criteria. Still others are particular to a specific Vehicle Identification Number (VIN), so while the rebate may be on a certain car on the lot, it may not be on the identical one right next to it. Rebates are deducted from the MSRP and any dealer discounts, but depending on your state, they may still be taxable. For example, Wisconsin applies tax to any rebates on a vehicle, therefore sales tax is computed prior to applying any rebates. Another important aspect of rebates is that they are often time-sensitive. Generally, manufacturers release rebate incentives to the dealerships and advertisers at the beginning of the month, and they may only be good through the end of the month. Be sure to ask your sales person what rebates are on the vehicle you are interested in and when they expire. Also, be sure to ask if you qualify for any additional rebates.

Dealer Discounts

Aside from the manufacturer wanting to earn your business, dealerships do too. For that reason, the majority of our new cars, trucks, and SUVs here at Gross Motors are discounted from the MSRP as a way to earn your business while staying competitive with other local dealerships. The price tags in the windshields of our new vehicles show the MSRP and also the price after our dealer discount and rebates. Our used vehicles are discounted too! Gross Motors is known as the home of the No Hassle Price. We price our vehicles on the internet where we know everyone can see them, and for that reason, we know we have to be competitive.

Service Fee

Service fees are taxable fees charged by the dealership as a way to off-set administrative and other costs. Wisconsin allows dealerships to set their own service fees, but requires them to be posted on the vehicle as a means of disclosure to the customer. On new vehicles, there will be a separate sticker indicating the service fee. On used vehicles, the fee will be posted on the Wisconsin Buyer’s Guide. These fees are are charged on every new and used vehicle that is sold. The Service Fee at Gross Motors is $198.00.

Sales Tax

Like any other retail product, new and used vehicles are subject to the sales tax laws of the state and county. Sales tax in Wisconsin is 5.5%, and applies to the following costs of the vehicle: price of the vehicle, accessories and environmental protection products (undercoating, rustproofing, paint/interior protection, etc.), rebates, and service fees. For more information on how taxes are applied to vehicle purchases, visit your state’s IRS website. Click here for information about Wisconsin: Wisconsin DOT Sales Tax


This fee is charged by the state’s Department of Motor Vehicles or Department of Transportation and differs in each state. It covers the state’s cost of processing and issuing the title for your vehicle. The title fee in the state of Wisconsin is $69.50.


The cost of registering your vehicle is dependent on the type of vehicle you are purchasing. Cars are generally less than trucks, and small (light duty) trucks are less than large (heavy duty) trucks. Several other factors play a part in the license cost, so it is best to visit your state’s DMV or DOT website for full details on how much it will cost you to put a license plate on your vehicle. For Wisconsin, you can click here to see a range of costs: Wisconsin DOT Vehicle Registration

Note: If you are transferring your plate from one vehicle to a similar vehicle (car to car, car to SUV, truck to truck, etc.), you may be able to waive the license fee, depending on your plate’s expiration date. Ask your sales person if you have questions about transferring your plate.

Processing Fee

This fee covers the cost of the state’s DMV or DOT to either issue new plates or transfer your old plates to your new vehicle, whichever the case may be. In Wisconsin, the Processing Fee is $19.50.

Loan Filing Fee

A loan filing fee covers the financial institution’s cost of filing the loan at their institution. The loan filing fee in the state of Wisconsin is $10.00

Trade-In Value

The most common question customers have regarding their trade-in vehicle is “what is it worth?” The value of your trade-in is based on many factors, which we will discuss in-depth in a future article. However, it is important to understand how your trade-in plays a part in how much you pay for your new car. When the dealership offers you a value for your trade-in, that value is deducted from the price of the new car before taxes are computed. Have more than one vehicle to trade? Most dealerships will allow you to trade in more than one vehicle towards the purchase of a new one.

Note: If you are still making payments on your trade-in, the amount you owe will reduce the credit that is applied to your new vehicle by that amount. For instance, if the value of your trade is $13,000, but you still owe $5,000, only $8,000 will be applied towards your new vehicle.

What Am I Paying For?
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The Math

Based on everything we’ve covered in this article, here is a quick scenario to help you determine the price of a new car. All numbers are fictitious and do not represent any particular vehicle, accessories, discounts, or rebates:

MSRP (sticker)        ($25,600)

  • - Dealer Discount       ($500)
  • - Trade-In Value         ($2,500) 
  • + Added Accessories  ($300)
  • = Vehicle Price           ($22,900)

Vehicle Price         ($22,900)

  • +Service Fee          ($198.00)
  • + Tax (5.5%)         ($1270.39)
  • -Rebates                ($1,000)
  • +Title Fee              (69.50)
  • +Processing Fee     ($19.50)
  • +Loan Filing           ($10.00)
  • +License                ($75.00)

= Out-The-Door Price    (23,492.39) 

We hope this helps you better understand pricing as it applies to buying a new (or used) car. Of course, the friendly folks at Gross Motors are happy to explain everything in further detail and answer all of your questions. We look forward to seeing you soon!

What Am I Paying For?
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