Dealer Add-On’s & Extras
– What You Need To Know

It’s a car dealership…doesn’t it make sense that most of their profits are made by selling cars? You’d think so. Well think again! The truth is that a majority of a car dealer’s profits come from add-ons. These additional products and/or services include, financing, VIN etching, gap insurance, vehicle recovery systems, alarm systems, paint protection, fabric protection, rust proofing, pin striping, undercoating and extended warranties.

Keep in mind that most of these add-on items won’t even be discussed until you are in the finance office. That’s right; you’ve made your decision and perhaps foolishly think the “hard” part is over. They’ve got you right where they want you, excited about your purchase, with your guard down. That’s when they go in for the kill and desperately try to convince you that you need all these expensive add-ons. But don’t fret, you don’t need most of these items and those you decide you do want can be found elsewhere for much less.

Here’s a breakdown of what these items really cost the dealer and what you can do to save yourself money.

Product/ Service	Ave. Dealer’s Cost	Ave. Retail Price	Dealer Profit	Recommendation
Extended warranty	$800	$1,800	$1,000	Good idea.  However, don't buy at the dealership without shopping around first.  You’ll find quality, affordable warranties online.  Big savings!
Financing	$?	?	Big bucks!	Dealers typically add 2-2.5% in APR to loans they provide.  Set up your own financing through your bank or credit union before you head to the dealership and then ask if they can beat it.
Undercoating	$200	$700	$500	Most new cars come with warranties against rust and corrosion.  Don’t buy it.
Rust proofing	$50	$800	$750	Most new cars come with warranties against rust and corrosion.  Don’t buy it.
Pin striping	$30	$300	$270	Check with an independent shop for a better price.
Car alarm	$300	$800	$500	Not a bad idea, but the mark up will be significant at the dealership.  Again, get a quote from an independent shop and save yourself some money.
VIN etching	$75	$200	$125	Not a necessity. DIY, buy a window etching kit and do it yourself for $20.
Vehicle Recovery System	$325	$800	$475	Consider this, but get prices from an independent installer first.

Just a quick glance shows you that being forewarned about add-ons and profits can save you thousands of dollars. And, the list above does not include the cost of factoring most of these costs into your finance package! Many customers end up paying double or even triple these costs by the time they’ve paid off the vehicle.

One last piece of advice…don’t be a “Lay down” or “Grape”. That’s car salesman jargon for a customer with no spine who says yes to everything. They lay down and get run over or flattened like a grape. It is however okay to be a “runner”. This is what a salesperson yells when a customer gets up from the negotiating table and proceeds to walk out the door. The customer gets up and the salesperson says, “We’ve got a RUNNER!”

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