Buying a new car is more expensive than it's ever been. In 2021, the average new car cost more than $45,000!
Taking care of a new car can also be very costly. The average vehicle owner spends almost $10,000 per year on maintenance, repairs, fuel, auto insurance, and more.
With these things in mind, the absolute last thing you want to do is pay for a bunch of dealer add-ons on top of everything else when you buy a car. They could blow your budget every month and make you hate your car before long.
When you're sitting at a dealership and buying a car, many of these dealer add-ons might sound like a great deal. But the truth is that they're not usually worth the price and won't benefit you very much when you drive your new car off the lot.
Here are eight dealer add-ons you should always avoid.
1. Extended Warranties
Right before you're ready to sign on the dotted line and buy a car, dealers will often offer an extended warranty to you. These warranties are also sometimes referred to as vehicle protection plans by some dealers.
In theory, an extended warranty sounds great. It provides you with coverage for a bunch of the parts in your car once the standard warranty from your car's manufacturer ends. You'll also get some maintenance and repair jobs performed on your car at no charge when you have an extended warranty.
The problem, though, is that most dealers charge people a small fortune for extended warranties. They also make them feel like they have to sign up for one as soon as they buy a car.
But in reality, you can sign up for an extended warranty for your car whenever you want. You can also get an extended warranty either through the lender who gave you a loan for your car or through your auto insurance company.
By going this route, you can save a lot of money while still protecting your car. This is one of the dealer add-ons that's hardest to say no to, but you shouldn't commit to an extended warranty until you've done the necessary research.
2. Gap Insurance
Most people are well aware of the fact that a new car starts to depreciate as soon as they drive it off a dealer's lot. But what they don't always realize is that this could affect them in a big way if they're involved in an accident right after buying a car.
Your auto insurance company is only going to give you what your car is worth if you total it during an accident, not what you still owe on it. So if you owe $20,000 on a car but it's only worth $15,000 in the eyes of your auto insurance company, you still owe $5,000 on it. This is thanks to the "gap" between what you owe and what it's worth.
Car dealers will inform buyers about gap insurance and offer coverage by using scare tactics. Buyers who panic over owing more than the car is worth often succumb to the pressure and invest in gap insurance through the dealer regardless of how much it costs.
You're much better off talking to your credit union or bank about the types of gap insurance they offer. It'll cost just a fraction of what it costs through a dealer and offer all the same protection. Check out some of the options that Education First has to offer!
3. Window Etching
There are a lot fewer car thefts in the U.S. today than there were 30 years ago. In 1991, there were more than 1.7 million cars reported stolen. Today, there are only about 775,000 car thefts every year.
This means that you probably won't have to worry about your car getting stolen. But just in case it does, some car dealers will try to sell you on the idea of getting window etching done.
For anywhere from $200 to $500, a dealership will etch your car's VIN number into your windows. They'll convince you that this makes it easier for the police to find and identify your car if it's ever stolen. The claim is based on the assumption that it's unlikely a car thief would replace all of the windows in a car in an effort to have it go undetected.
The truth is, it's not worth the extra expense.
For starters, window etching isn't going to stop someone from stealing your car. Most thieves won't be bothered to check for window etching.
But maybe more importantly, there are cheap window etching kits that you can buy if you want added protection. This will save you hundreds of dollars and still allow you to enjoy the benefits of window etching.
4. Tire and Wheel Protection
Buying new tires for a car isn't cheap. On average, the cost of a single all-season tire for a car ranges from $80-$150 each and $100-$250 per tire for a truck or SUV.
Buying new tires for a car isn't cheap. On average, it costs upwards of $200 for all-season tires for a car and up to $350 for tires that will fit on a truck or SUV.
Many dealers try to use this to their advantage by selling tire and wheel protection plans that are supposed to cover every aspect of a car's tires. This includes the tires themselves in addition to the rims on a car.
If you happen to blow out a tire on the ride home from the dealership, you'll be glad that you invested in a tire and wheel protection plan. But otherwise, it's not going to take you long to realize that you overpaid for a protection plan that you'll probably never even use.
A better plan would be to set aside a little bit of money every month for tire replacement. This option is much cheaper and provides the same peace of mind.
5. Nitrogen for Tires
Most race car drivers fill their tires with nitrogen. That's because nitrogen provides more pressure stability and seeps out of their tires slower than regular air does.
But here's the thing: You're not a race car driver, so why in the world do you need to pay a dealer a couple of hundred dollars to put nitrogen in your tires?
For starters, your tires won't feel any different once filled with nitrogen vs. regular air. But if you really want to invest in this add-on, you can find a local tire shop to fill your tires with nitrogen for $10 or $20 at most.
6. Key Protection
Once upon a time, replacing a lost car key was simple. Since car keys looked just like house keys, they were easy to replace, and it didn't cost much to do it.
But so much for that! Nowadays, car keys have turned into mini-computers. They're programmed to work only with specific cars and can cost hundreds of dollars to replace.
Car dealers know this, and it's another thing that they try to take advantage of when selling cars. They play up how amazing car keys are but point out how much they can cost to replace. They then offer to provide people with key protection plans to cover the cost of lost keys.
But what they don't tell you is that you can replace lost keys for a lot cheaper than what you'll pay for key protection by bringing your car to a locksmith. Or if you really want key protection, you can often get it from your auto insurance company for less than what your dealer would charge you.
7. Paint and Fabric Protection
When you buy a brand-new car, it looks amazing. The paint is glistening and the interior has that "new car smell" that people love so much.
People will do anything to try and keep their cars looking and smelling like new. It's how so many car dealers get away with tacking on an extra $1,000 in some cases to provide people with paint and fabric protection.
The idea of protecting the paint on the outside of your car and the cloth or leather interior might sound appealing. But the truth is, you can avoid problems with your car's exterior and interior by cleaning it regularly.
And if you do happen to get a scratch in your paint or a stain on your interior, you can have it repaired or cleaned for a lot less than what you would have to pay a dealer to protect it.
8. Roof Racks
Having a roof rack on the top of your car can come in handy. You can use it to pack your car for a vacation or to haul gear if you're a thrill-seeking adventurer.
This might tempt you to say "yes!" when your dealer asks if you want a roof rack added on. But unless you're able to negotiate it into the price you're already prepared to pay for your car, it's not worth it.
You can get the same kind of roof rack that you would get from a dealer at a sporting goods store for less money. It's yet another dealer add-on that you don't need.
Say No to These Unnecessary Dealer Add-Ons
Buyer's remorse is something that a lot of new car buyers deal with shortly after purchasing a vehicle. One reason that some of them regret buying their cars is because of all the dealer add-ons they agreed to take on. These add-ons increase the overall cost of the loan over its entire term, which means that you will be paying interest on these add-on items for five to seven years.
Stop getting suckered into purchasing the add-ons listed here. You can find them available for a lot less somewhere else if you decide you want them later.
Check out our online shopping tool, AutoSMART, where you can browse dealer inventory, compare prices, and get pre-approved online, or visit our Financial Education section for more useful resources on purchasing a car.