Are auto loan add-ons worth the cost?


When buying a vehicle, you will likely come across add-ons that vary by car manufacturer. But they can entice buyers to spend more than expected. Learn about common add-ons and which extras are really worth it before you head to a dealership.

Determining what you should buy depends on your needs as well as the cost. Keep in mind that while you may be presented with many plan choices, you can decline them all. You also can negotiate these car services individually if you only want one. Later, you can also cancel all services if you decide you don’t want them.

1. Gap insurance

Gap insurance pay the difference between what you owe and what your car is worth. It’s a smart buy if you’re rent a car — if not already included in the rental contract. Gap insurance might also be worth the cost if you’re get a car loan for more than the value of the car, which can happen when the rest of your previous car loan is rolled into the payment for the new car. Still, it’s best to research gap insurance costs through other sources first to find out if the dealer is offering you the best price.

Is Gap Insurance Worth It?

Purchasing gap insurance is worth it if your new vehicle is likely to depreciate at a rapid rate. The credit will save you from having to pay the difference between the value of your vehicle and what you owe if the vehicle is declared a total loss.

2. VIN engraving

The VIN engraving is an engraving found on the windshield of your vehicle. It is made up of your vehicle’s identification number and is used to prevent potential theft. It makes your vehicle easily identifiable and therefore less valuable to thieves. Although insurance companies sometimes offer discounts to drivers who have this add-on, you can also do it yourself.

Is VIN engraving worth it?

This supplement is not worth it. You can easily do this at a retail store later or even with an online kit and you can pay as little as $20 for the process.

3. Extended Warranties

Extended warranties come into effect after the manufacturer’s warranty expires, but usually cover even less. Service packages are usually bundled with extended warranties and involve the purchase of scheduled maintenance checks. The price of a service plan is usually built into your monthly car payment.

Are warranty extensions worth it?

Extended warranties are only beneficial if you expect to own the car well beyond the manufacturer’s warranty – and even then, it’s not always the right choice. A maintenance plan is only useful if you are sure you want to go to that dealership for your maintenance and the maintenance can be performed less frequently than recommended by the manufacturer.

If you buy any of these options, take the time to research them service charge from other sources.

4. Tire and wheel protection

Tires can be very expensive. It is likely that dealerships will offer tire and wheel protection, an add-on that will cover the cost of replacing tires if they are damaged by, for example, potholes, nails or curbs while you drive. But what you need to keep in mind is that most tires have their own warranty, so if any issues should arise without dealer protection, you’ll probably still be fine.

Is tire and wheel protection worth it?

This addition depends on your driving experience, if you live in an area where you are more likely to experience issues with your four wheels, it might be worth looking into the added protection. But if not, you can most likely find cheaper options for the same amount of coverage outside of the dealership.

5. Paint and fabric protection

This addition is exactly what it sounds like, an extra coating that dealerships can add to the interior and exterior of your vehicle to protect it from damage. While it’s important to keep your new car in top condition, you can achieve the same results by visiting your local hardware store. Consider saving some money and doing it yourself.

Is paint and fabric protection worth it?

Often this is not a useful addition. While it might sound appealing to keep your new wheelset in the same condition it was in when you took it off the field, that’s not the way to do it. You can easily maintain the smell of the new car through your own maintenance and general vehicle upkeep.

6. Key protection

Unlike in the past, you cannot easily make a copy of your lost key at a locksmith. Due to the advanced technology that keys now contain, many dealers will push you to purchase key protection. This additional cost will likely cost you more than the price of replacing a lost key yourself. Many insurance companies offer much cheaper key protection. Along with that, if you’re worried about losing it, you can invest in technology like Tile, which will allow you to track your key.

Is key protection worth it?

This add-on is not worth spending extra money. You can easily replace your key if lost. Don’t be swayed by dealers who focus on the advanced technology that wrenches now have to offer.

You will pay interest on add-ons

It is important to remember that you will have to pay interest on any add-ons you decide to purchase with your vehicle. With that in mind, be very clear about exactly what is included and what will happen to your money should anything happen to the company backing these products when discussing with the retailer.

Often, dealers to offer add-ons as a package rather than as standalone items. This strategy – designed to sell more items – is often advertised as a “protection package” and usually comes in three tiers, grouped by bronze, silver, and gold.

Known as “menu selling,” this approach allows the dealership to ensure that the seller presents any additional items or services. the dealer offers. It also gives the dealership an easy way to make the customer feel that these packages aren’t optional, even though they are.

The bottom line

The purchase of a vehicle is accompanied by a additional cost laundry list which add up to a much higher number than advertised on the vehicle’s window. Do your best to only buy add-ons that are really worth it and not be pressured into spending more than you intended.

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