Buying a new or used car is a thrilling experience, but the excitement can quickly fade in the dealership’s finance office. This is where they often try to upsell you on costly add-ons that can significantly increase your total car price, sometimes by thousands of dollars, beyond the price you’ve already agreed upon.
These add-ons, ranging from extended warranties to paint protection, are frequently presented as essential or highly beneficial, yet their value, pricing, and necessity are often questionable. Unfortunately, some dealerships even resort to deceptive practices. The Federal Trade Commission (FTC) has highlighted concerning instances, such as the case with three Texas dealerships owned by Asbury Automotive, where add-ons were allegedly tacked onto sales contracts secretly or buyers were told they were required when they were not. In some cases, as many as 75% of car buyers reported such issues, with Black and Latino car buyers illegally charged hundreds of dollars more for the same add-ons.
To empower you, the consumer, and help you navigate this complex landscape, we’ve compiled a comprehensive guide to 14 common dealer add-ons and fees that demand your careful scrutiny. Our goal is to equip you with the knowledge to identify potentially overpriced or unnecessary extras, allowing you to make informed decisions and save your hard-earned money. By understanding these offerings and knowing your alternatives, you can ensure that the excitement of your new car purchase remains untarnished by unexpected costs.
1. Extended Warranties
Extended warranties, also called vehicle protection plans or service contracts, are sold to cover repairs after your manufacturer’s warranty ends. While the idea of protecting yourself from future breakdowns sounds good, buying these from a dealer at the time of purchase often means overpaying substantially, with many questioning their true value.
While a manufacturer-backed extended warranty *may* save money in the event of a catastrophic vehicle failure, the terms and conditions, especially for third-party contracts, are often buried in extensive fine print. Trying to thoroughly research such an offer in the high-pressure environment of a dealership’s finance office is a huge mistake. Glossy brochures rarely disclose all the crucial details and exceptions, making it essential to insist on seeing the actual contract before making any decision.
Furthermore, it’s vital to investigate the warranty company itself. Contacting the Better Business Bureau or other consumer advocacy agencies can reveal important information about their reputation, complaint history, and how long they’ve been in business. A key consideration is where you can actually get service. If your options are limited to the selling dealership, the coverage becomes worthless if you move or if the dealership closes. Deductibles and the claim approval process are also critical details to scrutinize.
Crucially, you are not obligated to purchase an extended warranty at the same time you buy the car, nor are you required to buy it from the dealership unless it’s the brand’s exclusive program. It’s always advisable to shop around. Consult your lender and insurance agent, and conduct online research to compare prices and coverage from various reputable providers. This proactive approach will almost certainly lead to a more favorable and transparent deal, saving you considerable money and providing peace of mind.
2. Rear-Seat Entertainment Systems
For families with children, rear-seat entertainment systems, typically screens installed in the second row of SUVs or minivans, can seem like a godsend for keeping kids occupied on long drives. Dealerships often present these as a convenient, factory-installed or accessory option. However, the cost of having an an aftermarket system installed by the dealership can be significantly higher than alternative solutions.
If such a system is a feature you truly desire, your best approach is to seek out vehicles that offer it as a factory-installed option. Integrating it during the manufacturing process often results in a more streamlined and potentially less expensive solution compared to a dealer-installed aftermarket unit. Factory options are designed to work seamlessly with the vehicle’s electrical and aesthetic systems, often avoiding potential compatibility issues or less-than-perfect installations.
Alternatively, consider the increasingly popular and often more versatile option of providing your children with personal iPads or tablets, coupled with headphones. These portable devices offer a vast array of entertainment choices—movies, games, educational apps—and can be used not only in your new car but also in other vehicles, during air travel, or simply at home. This flexibility and typically lower overall cost make personal tablets a compelling alternative to expensive, fixed rear-seat entertainment systems from the dealership.
3. Paint and Fabric Protection
Dealerships frequently offer specialized paint sealants and interior fabric protection packages, often priced at hundreds or even thousands of dollars. The sales pitch emphasizes safeguarding your vehicle’s appearance and preserving its resale value. However, many modern vehicles already come equipped from the factory with high-quality finishes and interior fabric protection, making these additional dealer offerings redundant or, at best, of highly questionable value.
Even if your car doesn’t have advanced factory protection, the cost of these dealer-applied products is usually exorbitant compared to what you can achieve through independent means. There are numerous far cheaper and equally effective options available on the market for protecting both your vehicle’s paint and its interior upholstery. It’s crucial to question whether the price of the product truly justifies the potential repairs it claims to cover. You could likely cover many minor dents or stains for the same amount you’d spend on the protection plan, and still have your money if no damage occurs.
Many of these protection plans are riddled with limitations and exclusions that severely diminish their utility when you actually need them. For example, specific types of damage or stains might not be covered, or the warranty might require strict maintenance schedules that are difficult to adhere to. It’s imperative to read the fine print and understand exactly what is and isn’t covered before considering such an investment.
For paint protection, regular washing and waxing with a high-quality car wax is an inexpensive and highly effective way to maintain its finish. For fabric, readily available spray-on products, such as Scotchguard, allow you to apply protection yourself at a fraction of the dealer’s cost. Always test any product on an inconspicuous spot first to ensure compatibility. These DIY solutions offer comparable or superior protection without the massive dealer markup.
4. Key Protection
With the increasing sophistication of car keys and key fobs, their replacement cost has skyrocketed, often running into several hundreds of dollars. Dealerships capitalize on this by offering “key protection” plans, sometimes even displaying a price tag on the keys themselves to highlight their value. While it’s true that modern keys are more complex and costly to replace and reprogram, paying hundreds of dollars to insure them through the dealership is generally not a wise financial decision.
Consider the economics: paying a couple of hundred dollars to protect a key that costs $500 to replace and reprogram offers limited value, especially if you roll this cost into your auto loan and incur additional interest over time. Moreover, if your key experiences a mechanical or electrical malfunction, it’s highly probable that such an issue would already be covered under your car’s bumper-to-bumper manufacturer warranty, making a separate key protection plan redundant for these types of failures.
Did you know that most car insurance policies don’t cover lost or damaged car keys or key fobs? Fortunately, insurance companies usually offer key coverage as an affordable add-on to your existing policy, which is generally a much smarter and more cost-effective choice than dealership-specific plans.
For those concerned about losing their keys, inexpensive tracking devices that link to smartphone apps offer a practical and much cheaper alternative. Additionally, some key protection packages include services like towing and locksmith assistance. Similar or even more comprehensive services are often available at lower prices through automobile clubs, such as AAA, which also provide a wider range of roadside assistance benefits. Always explore these external options before committing to an expensive dealer plan.
5. Anti-Theft Window Etching
Dealer-offered VIN etching on your car’s windows, which marks your Vehicle Identification Number on the glass to deter thieves and help police recover the car if stolen, is typically a rip-off. You can often pay a hundred dollars or more for this service at the dealership, but it’s widely considered a waste of money for most drivers.
The effectiveness of VIN etching as a deterrent is debatable. A thief is unlikely to notice or be deterred by etched glass before stealing the car. Furthermore, your vehicle’s VIN is already stamped in many places around the vehicle by the manufacturer, meaning that adding it to the glass provides minimal, if any, additional value in aiding its recovery. The primary VIN locations are already sufficient for identification purposes by law enforcement.
It’s not uncommon for dealerships to pre-print window etching and its associated cost on sales forms, making it appear as a mandatory part of the sales contract. This is a tactic designed to make you believe it’s required, when in fact, it is not. If you do not want this service, you must insist that the cost be removed or substantially discounted from your contract. Refusing to pay for an unwanted add-on is your right as a consumer.
Often, window etching packages also include some form of “theft protection coverage.” For the most part, these coverage plans are loaded with exclusions and serve primarily to inflate the dealer’s profit margin on the product. If you genuinely wish to have VIN etching for personal peace of mind, you can easily purchase a DIY kit online for around $20, saving you a considerable amount compared to the dealership’s offering.
6. Gap Coverage
Guaranteed Asset Protection, or “gap coverage,” is designed to cover the difference between what you owe on your car loan and what your car is actually worth if it’s declared a total loss or stolen. This is particularly relevant when you owe more on the loan than the vehicle’s market value, a common scenario due to rapid depreciation after purchase. Most leasing companies require gap coverage, and it can be a sensible safeguard for certain buyers, ensuring the car’s financing is fully paid off without leaving you saddled with debt for a vehicle you no longer possess.
However, purchasing gap coverage directly from a car dealer without first exploring alternative options, thoroughly researching the extent of the coverage, and critically evaluating the price, can prove to be an expensive mistake. Dealerships often treat gap insurance as a significant profit center, marking it up considerably. While it provides a valuable service for both you and your lender by covering the financial shortfall, you are not obligated to buy it from the dealership, even if your lease agreement mandates it.
It is highly advisable to shop around for gap coverage. Your existing auto insurance company is often a primary source, as they frequently offer gap coverage as an affordable add-on to your regular policy. Additionally, your lender (bank or credit union) might also offer competitive rates for this type of protection. When comparing options, do not base your decision solely on price. It is crucial to examine what the policy specifically covers, any limitations or exclusions that might apply, and the reputation of the company providing the insurance.
A crucial point to remember is that if you’ve rolled the outstanding balance of a previous car loan into the financing for your new vehicle, gap coverage may not cover your entire combined loan balance. This is an important detail to clarify with any provider. In most cases, however, adding gap coverage to your existing car insurance policy will be the most affordable and straightforward way to obtain the protection you need.
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. This negotiation strategy can save you money while ensuring you receive the necessary protection.
7. Nitrogen-Filled Tires
Dealerships sometimes offer to fill your tires with nitrogen for a fee, often a hundred dollars or more, presenting it as a premium service with distinct advantages. Proponents claim nitrogen is more temperature stable, leading to less fluctuation in tire pressure with seasonal changes, and that it seeps out of tires more slowly than regular air. These characteristics are said to potentially extend tire life and maintain more consistent tire pressures.
While nitrogen tires are less susceptible to pressure changes and leaks slower than regular air (which is already about 78% nitrogen), the benefits for everyday drivers are usually minimal compared to the cost. It’s really only beneficial for race cars where precise tire pressure is crucial, but for your daily commute, slight pressure variations won’t significantly impact mileage, handling, tire wear, or safety.
The notion that nitrogen-filled tires eliminate the need to check tire pressures is a misconception and a potentially dangerous one. Regularly checking your tire pressures is not only essential for maintaining optimal performance and safety but also provides an opportune moment to visually inspect your tires for any signs of damage or wear. Relying solely on nitrogen to maintain pressure could lead to overlooking critical issues that could compromise your safety on the road.
If you’re still set on nitrogen tires despite the dubious benefits, never pay the dealership’s outrageous price! You can find independent tire shops that will fill your tires with nitrogen for just a few dollars per tire, making it a much more affordable option. Always weigh the actual advantages against the dealer’s massive markup and explore cheaper alternatives.
Having armed yourself with knowledge about the initial set of common dealer add-ons, our journey to empower you against unnecessary expenses continues. In this section, we delve deeper into seven more dealer extras and equip you with essential strategies to safeguard your finances from hidden costs and upgrades that simply don’t deliver the promised value. Remember, an informed consumer is a powerful consumer, and understanding these offerings is your best defense against inflated prices and questionable necessity. The goal remains to ensure that your vehicle purchase is defined by excitement, not regret over avoidable expenses.
8. Credit Insurance Products
Dealerships often present credit insurance plans with an enticing sales pitch: if you, the borrower, die or become disabled, the policy will pay off your loan, sparing you or your survivors from a burden of debt. While this sounds like a reassuring safeguard, it’s crucial to understand that such plans are primarily beneficial to the lender, not necessarily the borrower, who often pays a high price for this coverage.
Typically, these products come with two types of premiums. One involves a substantial upfront payment that covers the entire loan term, while the other incorporates a fee into your monthly payments that diminishes as your loan balance decreases. Opting for the upfront payment and rolling it into your car’s financing means you’ll be paying interest on that insurance premium for the entire life of your loan, significantly increasing its true cost.
Before committing to such coverage, thorough research is highly recommended. In many instances, consumers can secure an affordable term life and disability policy for less money through independent providers. A key advantage of an independent policy is flexibility: if an unforeseen event occurs, you or your family would have the option to use the proceeds to pay off any of your debts, or allocate the funds to other pressing financial obligations, with any remaining money going directly to your bank account or estate.
Additionally, a similar type of coverage exists to protect you from debt if you become unemployed. Before you sign up for this at the dealership, it’s always a good practice to consult with your existing loan provider and car insurance company. They might offer equivalent coverage at a more competitive price. It’s also imperative to remember that, in most states, car dealerships are legally prohibited from requiring you to purchase these types of policies as a condition of buying a car. If a dealer attempts to mandate such a purchase, consider it a significant red flag and be prepared to walk away from the deal.
9. Factory Roof Rack Accessories
Automakers offer many roof rack accessories designed specifically for their factory racks, which might seem convenient to buy with your new car. However, you can often save a significant amount of money in the long run by choosing accessories from aftermarket brands instead of these dealer-specific options.
Instead, consider purchasing aftermarket accessories from reputable rack companies such as Thule or Yakima. These companies offer a wide range of products that come with adapters designed to fit various factory crossbars, providing you with far more flexibility and choice. The financial benefits of this approach extend beyond just the initial purchase price.
Choosing generic rack accessories means you can often move them from one vehicle to another, eliminating the need to buy new accessories every time you purchase a different car. Furthermore, the selection of available aftermarket accessories is typically much broader than the limited options offered by dealerships, allowing you to find the exact solutions that meet your specific needs and lifestyle.
While some automakers have started to incorporate parts from well-known brands like Thule and Yakima into their own rack systems, and purchasing these at the dealer might allow you to roll the cost into your car’s financing or benefit from the car’s warranty, the initial prices at the dealership are often higher than what you’d find at sporting goods stores or online retailers. Weigh the convenience against the potential for significant savings and greater versatility.
10. Windshield, Tire & Wheel, or Dent Protection
Car dealers, both for new and used vehicles, commonly present a suite of protection packages, including plans that specifically cover your car’s glass, its tires and wheels, or even minor dents in the bodywork. For the vast majority of buyers, a more prudent financial strategy is to simply set aside the money you would have spent on these plans and pay for any repairs out-of-pocket, if and when they become necessary.
If you find yourself considering one of these protection plans, it’s absolutely critical that you do not rely solely on the appealing, glossy sales materials provided by the dealership. Instead, make an unequivocal demand to review the actual contracts that legally underpin these protection programs. You will often discover an extensive list of conditions and exclusions—sometimes an entire encyclopedia’s worth—that dramatically diminish the real-world value and utility of these programs.
It’s also wise to investigate the health and reputation of the companies behind these coverage plans. Search their names online and contact the Better Business Bureau or other consumer advocacy groups in their location. This due diligence can reveal important insights into their customer service history and how reliably they honor their commitments. Such research helps you avoid being stuck with a policy that offers little practical benefit when you need it most.
Be very skeptical of windshield protection treatments that claim to strengthen and protect your glass, and ask yourself why automakers don’t apply these treatments at the factory if they’re so effective. While some road damage might not be covered by basic comprehensive insurance, most common issues are, and you’ll likely save money by handling any repairs yourself rather than paying for dealer packages.
11. Tire and Wheel Packages
Stepping onto any showroom floor, you’re likely to encounter several vehicles showcased with attractive aftermarket or upgraded tire and wheel packages. The additional cost for these often-pricey upgrades will conspicuously appear on addendum stickers, displayed right alongside the manufacturer’s window sticker. These are presented as a premium enhancement, but their value, especially at the dealer’s price, warrants close inspection.
If you are interested in the car but not in acquiring these particular fancy wheels, it is entirely within your rights to negotiate their removal from the final sale. It’s a common scenario for the original, standard tires and wheels to be stored in the dealership’s back shop. While a salesperson may initially be reluctant to admit this without securing another concession on the car’s price, know that this swap is usually feasible.
If the dealership agrees to reinstall the original wheels, it is imperative that you ensure this exchange is completed and verified to your satisfaction *before* you sign any final paperwork. This precaution prevents any last-minute discrepancies or additional hassle. Furthermore, before you consider purchasing custom tires and wheels directly from a dealership, meticulously compare the warranties offered to ensure they match or exceed the original coverage provided for the stock tires, wheels, and sensors of your tire pressure monitoring system.
Most importantly, thoroughly research what a similar or even superior package might cost you outside of the dealership. Independent tire stores or online retailers such as Tirerack.com often provide significantly more competitive pricing and a much broader selection. By exploring these external sources, you can procure the exact wheels and tires you desire, rather than being limited to the specific options chosen by the dealership for showroom display, often at a substantial markup.
12. Window Tinting and Clear Film Protection
In many climates, automotive window tinting transcends mere aesthetics to become a practical necessity. It can dramatically improve a vehicle’s appearance, enhance privacy, and make it more difficult for opportunistic thieves to peer inside. However, opting to purchase window tinting at the dealership could easily lead to overpaying for this service.
Instead, it is strongly advised to conduct thorough price and product comparisons from multiple independent retailers specializing in automotive tinting. These specialized shops often offer a wider array of tint films, varying in quality, UV protection, and longevity, allowing you to choose a product that best suits your needs and budget. The same discerning approach should be applied to plastic film protection products, often referred to as Clear Bra.
There is a significant range of products available on the market, and their quality and durability can differ substantially. It is prudent to search online reviews and forums to ascertain which products are performing most effectively for consumers in your specific geographic area, as different environmental conditions can impact the performance and longevity of these films.
A paramount consideration for both window tinting and transparent protection film is the quality of installation. A shop that specializes in these applications and performs them regularly is almost always a superior choice compared to a general dealership service center that only occasionally applies such products. Expert installation is crucial for a flawless finish, optimal performance, and long-term durability, preventing issues like bubbling, peeling, or misalignment.
13. Car Alarms and Tracking Systems
Before you consider purchasing an aftermarket alarm system or a vehicle tracking system, such as LoJack, directly from a car dealer, it is highly advisable to shop around at independent car electronics retailers. By doing so, you can often secure a better price, or more importantly, find a system that is specifically tailored to your individual needs and preferences—assuming, of course, that you genuinely want or require an aftermarket system to begin with.
It is not uncommon for some dealerships to proactively install security systems on every vehicle within their inventory, primarily as a measure to prevent theft from their own lot. They will then attempt to sell you this pre-installed system when you purchase the car. If you do not want this system, it is crucial to insist that it be removed in its entirety, or that its price is substantially discounted, before you agree to finalize your purchase. If you are special ordering a vehicle, make sure to explicitly request that the dealer refrains from installing any such security system upon its arrival.
It’s also worth noting that many new cars today come equipped with standard alarm systems as part of their factory features, providing a baseline level of security without additional cost. Furthermore, a growing number of vehicles are available with integrated subscription-based telematics systems, such as Chevrolet OnStar, Kia Connect, or Hyundai BlueLink. These advanced systems often include robust vehicle tracking capabilities as part of their comprehensive service packages, potentially negating the need for a separate, dealer-installed tracking system.
14. Delivery Fees
While not an “add-on product” in the traditional sense, a delivery fee is unequivocally something you should be vigilant about and strive to avoid paying at the dealership. This charge represents a relatively new tactic employed by some dealerships, designed to trick unsuspecting buyers into paying twice for a service that is already inherently included in the vehicle’s original price sticker.
You will likely not encounter this separate delivery fee until you are in the final stages of the transaction, poised to sign the concluding paperwork. When it does appear, it will typically be presented as an amount that is identical to or very similar to the “destination charge” that is clearly itemized on the manufacturer’s window sticker. Many shoppers, understandably, confuse the two charges and, as a result, end up unwittingly paying both fees.
If a dealer claims a separate ‘delivery fee’ covers transporting the car from the factory to their lot, they are misleading you. The legitimate ‘destination fee’ on the price sticker already covers this shipping cost. If you see an additional delivery fee on your contract, firmly insist that it be removed immediately.
Your right as a consumer is to only pay for the legitimate destination charge, which is already part of the vehicle’s advertised price. If the dealership refuses to remove this redundant and often deceptive charge, it serves as a strong indication of their unwillingness to be transparent and fair. In such a scenario, it is a profoundly wise decision to walk away from the deal entirely and seek out a more ethical dealership that values honesty and customer trust.
How to Avoid Buying Add-Ons
Navigating the dealership experience requires vigilance and a firm resolve. If you find yourself in a situation where you simply don’t have the time to thoroughly research any expensive add-on products while you are at the dealership, it is unequivocally in your best interest to pass on them. There might be considerable pressure exerted to make a purchase decision on that very day, but it’s crucial to recognize that creating a false sense of urgency is a tried-and-true sales tactic, nothing more.
If you’re concerned about your ability to firmly say “no” under pressure, a smart strategy is to bring a trusted friend or family member along with you. This isn’t the person who encourages impulsive purchases, but rather the one who meticulously watches every penny and insists on splitting the lunch bill down to the precise cent. Their objective presence can provide invaluable support and a crucial second opinion.
You’ll likely be told that if you don’t buy these products at the time you purchase the car, you won’t be able to include them in your financing. While technically true for many dealer-specific add-ons, the potential savings from researching and acquiring these items independently, or realizing you don’t need them at all, often far outweigh the convenience of rolling a marked-up product into your auto loan and paying interest on it for years. Remember, the true power lies in being prepared and informed.
To safeguard your interests, always read the sales contract and financing agreement with meticulous care, cover to cover. Insist on receiving a printed copy to review in detail. Crucially, ensure that all the terms you explicitly agreed upon verbally match precisely what is documented in the contract. If you spot any extra fees you don’t recognize, demand clear answers and instruct the dealer to immediately remove any add-ons you don’t want from the contract.
Focus on knowing your total cost, not merely the monthly payment. Get this comprehensive total in writing and verify that it includes every single charge, including any fees or add-ons. This diligent approach is your most effective tool for catching any additional charges or unwanted add-ons that dealers might attempt to tack on. Furthermore, never settle for the first financing offer. Shop around aggressively for financing from multiple sources; dealership financing frequently comes with marked-up interest rates. Explore options from your local banks, credit unions, and other financing companies. Getting pre-approved for a loan beforehand provides you with leverage to negotiate more favorable terms with the dealer.
Ultimately, your best defense is being informed. Knowing about these common dealer add-ons, understanding their real value, and exploring your alternatives will help you make smart financial decisions. If a dealer acts illegally or uses deceptive tactics, report them to the FTC at ReportFraud.ftc.gov, as your actions help hold the industry accountable for everyone.
