Car Dealer Extras You Should Be Wary Of

Buying a car can be a very exhausting process emotionally. By the time you have made a decision on a vehicle and have negotiated a price, you tend to relax. Actually, you would tend to more lax than relaxed. This is the moment you will be very vulnerable as an easy pick for what car dealers call the “up sell.” If you give in, the car dealer will add equipment or services that can push the cost of your car thousands more than you hoped to pay for that new car. Worse, if you get into a buying mood, the car dealer will seize the opportunity by suggesting overpriced add-ons that you don’t really need.

Extended warranties, life insurance, Gap Insurance, rust-proofing, theft protection and other bewildering variety of add-ons are a few of these car dealer extras that will add up to the euphoria of owning a new car. Very soon it dawns onto you that an extended warranty is of no use to you if you plan to trade it after three years in which case the original factory warranty will be more than enough. Most new cars come with at least a three-year, 36,000-mile warranty and it makes no sense buying a six-year warranty. Buy the warranty after three years if you intend to keep the car longer. Some car makers like Hyundai and Kia, are now offering five or 10 year warranties with their cars.

But then, if you wish to buy an extended warranty do not overpay. It is possible that your car dealer wants to hide the insurance costs into your car payment every month. Research thoroughly. Call in several dealers ahead of time for a price quote on a six-year, 75,000-mile extended warranty. This kind of knowledge puts you in a better position to checkmate the efforts of the car dealer to overcharge you.

The dealership might also suggest life insurance on your car loan so that if you die, the car is paid for. Or they might try to sell you a disability plan so that if you’re sick or injured, payments will be covered until you go back to work. In truth, you can probably buy life insurance cheaper elsewhere. Most people also have disability insurance through their jobs, so unless you’re in a manual job with a high risk of injury, buying extra coverage probably doesn’t make sense.

Gap Insurance offers a driver protection in case his vehicle is stolen or involved in an accident and declared a total loss. This is a policy that protects you if you owe more on your auto loan than the car is worth for a trade in. If you’re trading in a car that’s worth less than you owe, the dealer will often fold the difference into your new loan and you would lag far behind in the payments, since auto depreciation is the worst in the first year and your trade-in loss would exacerbate it.

When is Gap Insurance a safe proposal?

If you’re buying a car that you expect to trade in within a couple of years, gap insurance should be a useful protection. Even here, the price is negotiable and can be folded into your loan payment. Gap Insurance is worth it if it costs say, $400 to protect a $10,000 risk.

Car dealer extras you should really be wary of:

  • Be wary of the extra charges for the accessories you probably never have asked for
  • Don’t pay full price for the dealer-installed running boards or chrome wheels. Make the sale contingent on getting a discount
  • Don’t fall for a $300 charge for a $50 dealer-installed alarm for, every car comes with a factory-installed alarm
  • Some dealers may disconnect the factory-installed alarm and install their own, claiming theirs is better. Do not believe them

Do your homework ahead of time, and think twice before you say yes to the car dealer extras you may not need at all.

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