It is no secret that car dealers make a large proportion of money from selling extras on top of the vehicle itself. As a consumer, it’s important to be aware of what you may be offered and to consider whether you really need or want what they’re recommending you purchase. Furthermore, you’ll want to know that you’re getting a good deal.
Here are the top 5 extras that you may want to do without:
1. Extended warranty
Just like when you purchase an electrical appliance in your home, you may be offered the opportunity to extend the warranty on your car. Bear in mind, that most cars automatically hold a warranty of 3 years and over 20,000 miles. So, whatever warranty you are offered, deduct 3 years from this and ask yourself if it still feels like a good deal? If you’re planning on changing your car after a few years anyway, this option isn’t financially worth it.
Sometimes referred to as life insurance or a disability plan, this form of insurance is to ensure that your finances are still paid even if you become ill, unable to work or deceased. However, due to recent TV coverage, many more are thankfully aware of PPI and are savvy to avoid being mis-sold this product. However, it will still be offered. It can be a useful add-on, but make sure you aren’t forced into purchasing and that you would be a candidate for a pay-out should you become unable to meet your payments.
3. Extra parts
It is not uncommon for dealers to try and add extras onto your vehicle – from new alloys to protective coatings. They make an enormous amount of money from this as it is their own parts and labour being sold. In fact, they are not often any better than what comes as standard on the vehicle. If it’s something that you were already hoping to purchase, try to haggle the price. Remember, it’s their profit that you’re digging in to and they may be able to budge on the price, especially if you have done your research and seen it cheaper elsewhere.
Most of those on the market for a new car will use finance as a way of obtaining it: after all, not many have those large amounts of cash upfront for payment. Arranging finance for you is another way that a car dealer earns commission on your sale. Before you go to a dealer, take a look at what rates you could get on a bank loan; It may be cheaper and give you a monthly saving.
5. Gap Insurance
Gap insurance is an insurance policy which covers the difference between the value of a car should it be written off, with the balance still owned on the finance. This may sounds like an unusual one to recommend avoiding as we are providers of gap insurance, but the fact is, it is one of the areas where the dealer can make a huge profit from marking up the price of the product. What may cost you less than £100 from an independent specialist in gap insurance, such as ALA, could cost you triple that amount for the convenience of purchasing from the dealer. Don’t throw your money down the drain. If you have purchased a new vehicle but are waiting for it to arrive, you can buy gap insurance before you receive the car, eliminating any worries. Purchasing from a specialist will reduce the cost and leave you in safer hands.
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