Car dealerships have perfected the art of upselling. Not only do they sell vehicles but they also push various add-ons that can easily add as much as $2,000 to the final price of the car. Don't be an unsuspecting victim. Watch out for these hidden pitfalls when buying a new car.
Vehicle Add-Ons That Are a Waste of Money
Most add-ons are unnecessary, overpriced and purely for the dealership’s profit. Greg Fidan from Real Car Tips says that most car dealers don't make the majority of their profit on the sale of a new car. “The big profit comes through car financing, selling add-ons and accessories, and mark-ups on trade-in vehicles”. Here are four common add-ons that are not worth spending money on.
1. Nitrogen Fill For Tires
The salesperson at the dealership will wax lyrical about how filling your tires with nitrogen will reduce air leakage, improve your car's handling, and increase fuel efficiency. According to Edmunds, these claims don’t really stand up to scrutiny. Edmunds found that while there are benefits, these are nominal and not worth the $100 or more the dealer will tag on to your vehicle’s price.
2. VIN Etching on Windows
Many dealers recommend VIN etching on the windows as a deterrent to car theft. The rationale is that thieves will avoid a car with VIN-etched windows because it can easily be identified as stolen and they will have to replace the windows to avoid this. Most dealers charge around $300 for VIN-etching. What they don’t tell you is that you can buy a VIN kit for less than $50 and do it yourself! Furthermore, the car manufacturer has already added the VIN number to other parts of the car, making this an unnecessary add-on.
3. Paint and Fabric Protection
Dealerships inflate pricing for add-ons such as paint protection which many auto shops confirm is really just a wax job. The dealer will try to convince you by saying that it “guarantees” that the paint will be protected for five years or more. The fact is that the paintwork on a new car should last five years anyway. Fabric protection is also a waste of money as most car manufacturers use stain-resistant fabric in their new cars anyway.
An uninformed customer is a car salesperson's dream customer. It means they can fool you with add-ons like rust-proofing. They know most customers are unaware that rust-proofing is already included on all new cars. Don't be fooled into paying for something that’s already there! The salesperson is unashamedly trying to pull a fast one in an attempt to net a higher commission on the sale of the vehicle.
Vehicle Add-Ons Worth Considering
Not all vehicle add-ons are worthless. These two are worth considering.
Most standard maintenance warranties provide coverage for three to six years. If you plan to keep the car for that period, then you're already covered. If, however, you’re buying a used car or plan to keep your car after the standard warranty expires, then an extended warranty is useful. Bear in mind that you'll pay more for an extended warranty at the dealership. Wait until your standard warranty expires and then scout around for an extended warranty.
Brittany-Marie Swanson, a contributor on the personal finance blog The Simple Dollar, recommends the extended warranty from Endurance. Brittany researched the industry and found that most extended warranties are sold by a third party. Endurance is the only one that both sells and administers their own warranty directly to consumers. This means more efficient claim processing and prevents liability issues that can occur when a third party is poorly managed or goes out of business.
Gap insurance will cover the difference between the amount your insurance company will pay according to their estimation of the car's value and the amount still owed on the loan. Without gap insurance, you will be liable to cover this "gap" amount out of your own pocket. If you like having peace of mind, it’s worthwhile. Don't feel obligated to take the gap insurance offered by the dealership. You can find lower rates at other insurance companies.
Dealerships can be pushy when it comes to selling add-ons. They may try to knock down the price of add-ons to sweeten the deal or add them to your finance agreement to make it look like they come standard with the vehicle. Don’t get suckered by this. Remember, you are there to buy a vehicle, not add-ons. If you notice certain items have been added to your contract that you didn't request, insist that they remove it.
Need more help? Read our post on how to negotiate a car purchase.