You’ve chosen the car you want and have negotiated a price you are happy with. You’re ready to drive off the lot, but the dealer is not done with you yet. Before giving you the keys, he may try to talk you into additional products or services—known as add-ons or F&I (finanace and insurance) products—that will add to the price of your car. To protect yourself from unwanted expenses, understand what these add-ons are and make a decision about whether you want them or not before you buy the car.
Add-Ons You May Be Offered
Dealerships don’t make a lot of money on the sale of a car. In fact, most dealerships only have a profit margin of one to two percent on a new car. That 
means that when a car sells for $25,000, the dealer only nets between $250 and $500. Car dealers make most of their money from the financing, servicing, and the F&I products and selling used cars. Another source of profit for dealers are the products and services they add on to the sale of the car. Examples of these add-ons include:
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Rustproofing. Dealers will often try to convince you to pay for a rustproofing service, especially if you live in snowy areas. However, new cars are much less prone to rust than they used to be and in most cases factory rustproofing is all you need.
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Fabric protection. You want your new car’s interior to stay clean and fresh-smelling, so you may be tempted by the dealer’s offer of fabric protection. But the dealer will charge you $100 or more to do something you could easily to yourself.
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Gap insurance. Gap protection is insurance that covers you when you owe more on your car than it is worth. If you total your car and the amount the insurance company offers you is less than what you owe on your car loan, gap protection will cover the difference. However, it is rare to owe more on your car than it is worth and you will likely never need this protection.
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Service contract. Also known as an extended warranty, when you buy a service contract you are paying for repair services not covered by the manufacturer’s warranty which you may never need. In most cases, this is a waste of money.
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Life insurance and Disability insurance. If you need disability or life insurance contact a company that specializes in these product. If you get this through the dealer it will receive a commission and cost you much more than if you deal directly with an insurance agent.
Look for Hidden Add-Ons
A dealer is perfectly within his rights to offer add-ons with a new car sale. However, if a dealer adds these products to your invoice without your permission, he has committed fraud. Protect yourself by carefully reading the final invoice and demanding that any add-ons you did not approve be removed. The dealer will tell you your monthly payment if you are finacing through them. Make sure this monthly payment does not include the cost of any add ons when you are negotiating about the financing. If you have questions about whether you are the victim of auto fraud, fill out the form on this page and we will let you know.
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