14 Common add-ons. Should you buy them from the dealer?
Dealers make a lot of money from expensive add-ons. If you don’t have time to research, it may be best to pass on them, and if you can’t say no, take a trusted friend along who can.
Below are 14 common dealer add-ons to recognize and consider before you visit the dealer. Doing so can help you avoid costly mistakes.
Extended Warranties
If you pay full price at a dealer for an extended warranty at the time you buy your car, you’ll likely overpay – sometimes by thousands of dollars.
If you want to consider the warranty, insist on seeing the actual contract, as brochures won’t include all the details. You can also contact consumer advocacy agencies where the warranty company is based to see if others have filed complaints and how long the company has been in business.
Also consider where you can get service. If the only repair shop you can use is the dealer you purchased the car from, the contract becomes worthless if you move. Be sure to look at repair deductibles, and the process for getting a claim approved.
Despite any pressure the dealer may apply, you don’t have to buy an extended warranty when you buy the car. You also don’t have to purchase an extended warranty from the dealership, unless it’s the brand’s own program.
Rear-Seat Entertainment Systems
Entertainment screens are an easy way to keep kids occupied on long drives. They can be installed at the factory or as accessories at the dealer. There is, however, a much cheaper way to go.
Instead of getting the built-in system, opt for iPads or tablets with headphones. Not only are they much less expensive, but you can move them from car to car or take them on other travel. If you buy a vehicle with a built-in system, you’re locked into the technology until you replace the car.
Paint and Fabric Protection
Why spend hundreds or more for paint sealant or fabric protection for a car that already has a high-quality finish and interior fabric protection? Even if your car doesn’t, there are far cheaper options to get quality protection.
One of the selling points on these add-ons is a warranty for any damage to the paint or upholstery. Ask yourself how far the price of the product would go in having those repairs done if you ever have damage? You can have a lot of minor dents or stains repaired for $1,000, and you’ll still have that grand in your pocket if no damage occurs. Many of the protection plans are loaded with limits and exclusions that limit their utility when you need them.
Key Protection
A newer tactic to get buyers to take expensive add-ons is to have a price tag on the car keys that shows their replacement cost. It’s true, car keys are more complex and costly than ever, but you probably shouldn’t pay hundreds of dollars to insure them.
Paying a couple of hundred dollars to protect a key that costs $500 to replace and reprogram isn’t a good use of your money. That’s especially true if you include the cost in your auto loan and pay interest. If your key fails from a mechanical issue, it will likely be covered under your car’s bumper-to-bumper warranty.
Most standard automobile insurance policies won’t cover the damage or loss of your car keys or key fobs. Check with your insurance company, though, as you may be able to add the coverage at an affordable price. If you’re concerned about losing your car keys, you can get inexpensive tracking devices that link to smartphone apps.
Anti-Theft Window Etching
The sales pitch goes like this: By etching your vehicle identification number (VIN) on a car’s glass, its value to thieves is less, so they won’t steal your car. If it is stolen, having the VIN etching makes it easier for police to recover your vehicle.
Those facts may or may not be accurate, but paying a hundred dollars or more at the dealership is a waste. Chances are a thief won’t even notice if the glass is etched before they steal the car, and won’t be deterred if it is. Your VIN is already stamped many places around the vehicle, so adding it to the glass has little value in aiding its recovery.
It’s not uncommon for dealers to have window etching and its cost pre-printed on the sales forms, as if though it’s a required part of the sales contract. It simply is not. If it’s not something you want, insist that the cost is removed or substantially discounted.
Often included in the window etching package is some type of theft protection coverage. For the most part, theft protection coverage is loaded with exclusions and only serves to increase the markup the dealer wants to charge for the product. If you do want to have VIN etching, you can do it yourself for far less.
Guaranteed Asset Protection (GAP)
If your car is declared a total loss or gets stolen, and you owe more on your car loan than the vehicle is worth, GAP can pay the difference. The goal is ensuring its financing is paid off. It’s required by most leasing companies and is a good idea for some buyers.
Buying it from a car dealer without exploring options, researching the coverages, and considering the price you need to pay can be an expensive mistake.
GAP is a huge profit center for car dealerships. However, customers don’t have to buy it from them, even if your lease requires you to have it. You should also shop for coverage from your auto insurance company and lender. In addition to price, you’ll also want to look at what the policy covers, what limitations there are on that coverage, and what kind of reputation the company offering the extended car warranty has with consumers.
Check out NIHFCU’s GAP coverage and protection options at much lower costs than the dealership.
Nitrogen-Filled Tires
Filling your tires with nitrogen has some advantages. Tire pressure remains slightly more stable and it seeps out a little slower than normal air. Thus, your tires may last a bit longer. Should you pay a hundred dollars or more at the dealership for this? Probably not. If you really want nitrogen in your tires, many tire shops will replace your air with nitrogen for as little as a few dollars per tire.
While tire pressure is critical for race cars, having the tire pressure vary by a couple of pounds won’t have a significant effect on mileage, drivability, tire wear, or safety.
Credit Insurance Products
The sales pitch sounds fantastic: If you die or become disabled, the plan will pay off your loan, so you or your survivors aren’t saddled with a pile of debt. That’s great for the lender and no-so-great for a borrower who pays a high price for the coverage through the dealer.
There are typically two types of premiums. One has a large upfront payment that provides coverage for the length of the loan. The other has a fee that’s included in your monthly payments that declines as the loan balance declines. If you opt for the former and include the amount in your financing, you’ll be paying interest on it for the life of the loan.
Before you buy the coverage, you should do some research. In many cases, you can find an affordable term life and disability policy for less money. A cousin to credit life and disability insurance is coverage that takes care of your debt if you become unemployed. Before signing up for the coverage at a car dealer, it’s a good idea to check with your loan provider and car insurance company. You’ll want to see if they have equivalent coverage for less money.
It is important to remember that in most states, a car dealership cannot require you to take out these types of policies as a condition of buying a car. If they try, you should treat it as a red flag and walk away from the deal.
Check out NIHFCU’s debt protection and other protection options at much lower costs than the dealership.
Factory Roof Rack Accessories
Most automakers offer a range of roof rack accessories that only fit their factory racks. You can save a ton of money in the long run by skipping those items and buying accessories from rack companies with adapters to fit your factory crossbars.
The benefits of doing so go beyond price. You can move the generic rack accessories from car to car, and you don’t have to replace them when you buy a new car. The multitude of available accessories is likely to be much broader than the few accessories offered in the dealership.
Some automakers are starting to outfit their rack systems with parts from top manufacturers. While the initial prices at the dealer may be higher than you’ll find in sporting goods stores or online, you can include the purchase price in your car’s financing. In some cases, those parts will be covered by the car’s warranty.
Windshield, Tire & Wheel, or Dent Protection
Dealers will have several protection packages including plans that cover the car’s glass or tires and wheels. Other options cover bodywork if you get small dents. For many buyers, it may be better to save your money and pay for any repairs as you need to make them.
If you are considering one of the plans, don’t rely on the sales material alone. Instead, ask to look at the contracts that back the protection. Often you’ll find an encyclopedia’s worth of conditions and exclusions that dramatically reduce the value of the programs. Check on the health and reputation of the companies behind the coverage searching the internet and by contacting the Better Business Bureau or other consumer advocacy groups where they are located.
Some dealers offer windshield protection treatments that promise to strengthen and protect your glass. You should ask yourself, if such a substance existed, wouldn’t automakers be putting it on all of their cars?
While typical comprehensive auto insurance policies do not cover certain types of road damage, most types of damage are. For those that aren’t, you may be better off by skipping the dealer packages and saving your money to take care of any issues.
Watch out for salespersons that tell you that the protection packages are required on all cars that they sell. If that’s indeed the case, which it likely is not, it’s a sign you should be going to a different dealership.
Tire and Wheel Packages
Walk into any showroom, and you’ll likely see some of the cars displayed with aftermarket tire and wheel packages. The cost of those pricey add-ons will show up on addendum stickers next to each vehicle’s window sticker.
If you want the car, but not the fancy wheels, you’ll have to negotiate to have them removed. The original tires and wheels are probably in the back shop somewhere, though the salesperson won’t want to tell you that without getting some other concession on the car price. If they do agree to reinstall the original wheels, make sure the swap is completed before you sign the final paperwork.
Before buying custom tires and wheels at a dealership, you’ll want to consider whether you get warranties that match the original coverage on the stock tires, wheels, and sensors for the tire pressure monitoring system. Be sure to research what you can get a similar package for outside of the dealer, either from a tire store or online retailer. By going to an outside source, you can get the exact wheels and tires you want, not just ones that look good on the showroom floor.
Window Tinting and Clear Film Protection
In some climates, automotive window tinting is a necessity. It can improve the look of the vehicle and make it more difficult for thieves to see what’s inside. Buy it at the dealer, though, and you might pay too much. It’s better to make price and product comparisons from multiple retailers.
The same goes for plastic film protection products such. There are many products available, and they differ significantly in quality and longevity. You’ll want to search online to see which products are working best for people in your area, as the various products can perform differently in varying conditions.
A key consideration with either window tinting or transparent protection film is having it properly installed. A shop that specializes in its installation is a better choice than one that only occasionally applies the product.
Car Alarms and Tracking Systems
Before you buy an alarm system or vehicle tracking system from a car dealer, be sure to shop around at car electronics retailers. See if you can get a better price or a system that better meets your needs.
Some dealers install security systems on every vehicle on the lot. Doing so helps them prevent theft. They’ll then try to sell you the system when you purchase the car. If you don’t want it, be sure to insist that it is removed in its entirety, or the price is substantially discounted before you agree to buy it. If you special order a vehicle, ask that the dealer not install any security system when it arrives.
Delivery Fees
While not an add-on product, it’s still something that you should avoid paying at the dealership. Delivery fees are a tactic to trick buyers into paying twice for something that’s already included on the vehicle’s price sticker.
You probably won’t see the delivery fee until you’re ready to sign the final paperwork. It will be the same or very similar to the destination charge shown on the price sticker. Many shoppers will confuse the two and end up paying both fees. If anyone at the dealership tells you that a delivery fee is the cost of having the car delivered by the manufacturer to the dealer’s lot, they are not being honest with you. The destination fee on the price sticker is the cost of shipping to the dealership.
If you see a separate delivery fee listed, ask to have it removed. Unless they can come up with a great reason why it was not included in your price negotiations, it’s a good time to walk away from the deal.
Once you have an idea about how much you should pay for a policy, you can give the dealership a chance to meet or beat any lower prices or superior coverage plans you’ve found elsewhere.
source: cars.usnews.com/cars-trucks/things-you-should-never-buy-at-the-dealership