Just Say NO To These 3 Common Car Dealership Offers

While the joy of buying a new car, especially in these chaotic times, is a satisfying accomplishment, some dealerships expect even more from you than the sale of a car. They want to sell you extra insurance or warranty that you don’t really need or will ever use. So when it comes to buying from a car dealership, just say no to these three extra offers that only increase your monthly payments.

What is a third-party warranty?

Car insurance and warranties | Getty

Sometimes dealers call this an extended warranty or service contract. Whatever they call it, you don’t need it. First of all, you already have a factory warranty for a new car. It should cover everything from minor issues to catastrophic events like engine failure. And these warranties cover many years and many kilometres. So what is it beyond the manufacturer’s warranty that you would need an extended warranty for?

Whatever coverage you can get from a service contract is murky. Coverage and protection, in many cases, can be vague. Most are located out of state, which only adds to the potential problems if you think you need them.

Another problem is that there are dealers who sell you the warranty but never close the deal. So they pocket the extra money and call it a day. If you were to catch them, they would apologize and say someone didn’t turn in the papers. But how many times do you think a dealership would forget to hand over documents?

If service and warranties are important to you, first get a detailed description of what comes with the factory warranty. Then compare it, if you can, to what’s offered in the extended warranty. Look at what is actually covered and how much it pays for that coverage. Get everything in writing or better yet, just say no.

What is gap insurance?

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Buying and selling a car, insurance and warranties | Getty

There is another product that has questionable benefits. Gap Insurance provides comprehensive coverage for a totaled leased or financed vehicle. It is offered especially for buyers who lease or finance a car.

If you buy it separately from an insurance company, it normally costs around $25 more per month. Some car dealerships, on the other hand, charge you a lot more for coverage. And like liability insurance, a few dealerships will keep that money and you’ll never get the coverage.

If this sounds like a product you want to take advantage of, see the costs first. What is covered and for how much? Are there franchises? Get everything written in your contract so you have the information you need if you need to sue.

Should You Get Credit Life Disability Insurance?

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Flash floods, who pays? | Getty

Disability credit life insurance covers part or all of your car loan in the event of death or incapacity for work. According to ValuePenguin, a smarter option is to simply purchase term life insurance. This is the cheapest type of coverage you can buy. It will cover loans and other expenses. The other thing is that credit life insurance is rarely, if ever, actually used.

RELATED: What’s the Difference Between an Extended Warranty and a Basic Warranty?

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