Buying a car is one of the most expensive purchases many people make. Unfortunately, you also have to avoid certain car dealership gotchas that only line the pockets of the salesperson and dealer.
If you’re in the market for a new automobile, here are 11 things to avoid.
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Extended warranties do serve a purpose. However, you’re often better served by putting that extra money in a savings account instead to care for repairs.
Most of the cost of these warranties goes to the salesperson as a commission. Worse yet, most repairs are less than the cost of the warranty.
Dealers love to charge you $200+ for fabric protection. However, most dealers only apply Scotchgard.
You can do the same for much less.
Losing a key is a hassle. So, dealers like to sell you coverage to protect you in the event you lose your keys.
This is another useless money-maker for the dealer. Save your money instead and cover the expense personally, if it ever occurs.
Roof Rack Accessories
Do you surf or kayak? You likely need a roof rack. Dealers love to sell these with a handsome markup.
Instead, purchase one yourself and save the cash.
Your dealer may want you to believe that you’re at risk of needing to replace the entire windshield at some point in the life of your car. Modern technology makes that not so in most cases.
Instead of opting for needless coverage, save for repairs so that you will be covered.
Who wants a dent in their new car? No one does, so dealers love to charge you four figures for dent protection. It’s not worth the cost.
They don’t help you process claims, and it’s all outsourced.
Car dealers love to sell the fear of what happens if you lose your job or are disabled. What happens to your payments?
Credit insurance helps you make those payments. Fortunately, if you need coverage, you can get it for cheaper through your own provider.
Gap coverage is helpful. If you get in an accident and the car is totaled, it makes you whole.
Dealers love to overcharge for this coverage, so don’t give in to the fear. If you truly want it, you can typically get it for cheaper through your insurer.
Many cars today come with security systems or trackers. However, dealers love to pitch you by upselling alarms to unsuspecting customers.
Like many other things, if you want an alarm, you can get it for cheaper elsewhere and have your mechanic install it.
Cars today are made to withstand what they will encounter in the environment. Paying hundreds of dollars for sealant is often a waste of money.
Regularly wash your car, and the paint job should last the life of the car.
Dealers love to sell you on the idea that nitrogen-filled tires provide safety. Reports indicate that’s simply not the case, and any difference between nitrogen and standard air is minimal at best.
Save your money and use the air at the local gas station.
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I’m John Schmoll, a former stockbroker, MBA-grad, published finance writer, and founder of Frugal Rules.
As a veteran of the financial services industry, I’ve worked as a mutual fund administrator, banker, and stockbroker and was Series 7 and 63-licensed, but I left all that behind in 2012 to help people learn how to manage their money.
My goal is to help you gain the knowledge you need to become financially independent with personally-tested financial tools and money-saving solutions.