The "upsell"
Everything is going well at this stage. You've got the price you want at the rate you want, and you're ready to sign the bottom line and hit the road in your new ride. Now comes the final pitch for add ons. The F&I manager or a separate sales pro will attempt to coerce you into approving all kinds of gimmickry that is nearly 100 percent pure profit for the dealer. While there may be certain appeal for items at the right price, these last-minute additions to the bottom line mark the dealer's last chance to make up for your sharp negotiating skills.
The most expensive, and arguably most unnecessary, item likely to be pitched is an extended warranty. The dealership personnel may even attempt to tell you it's required by the finance company. This is untrue.
Despite its name, an extended warranty is not an extension of the factory warranty. In fact, it isn't a warranty, and it isn't honored by all of the dealers nationwide for your make of car. It is a private insurance policy that pays off in the event an expensive problem arises after the vehicle is out of its manufacturer-supplied bumper-to-bumper warranty. As with any other insurance, you have to pay the repair bill and submit a claim for reimbursement. There are deductibles, exclusions, and all the other hassles inherent with insurance. Buying the policy boils down to an expensive bet against your new vehicle. Your money would be better spent buying a vehicle with an excellent quality reputation, rather than saving money up front on a vehicle with a poor repair history only to spend the difference on an extended warranty.
If you want more extensive coverage, consider upgrading to a luxury brand that comes with a longer warranty. For example, Acura and Lexus cars carry longer bumper-to-bumper warranties than their Honda and Toyota brethren. Their dealers also typically earn much higher customer-satisfaction scores. So considering the longer warranty, better resale value, better treatment by the sales staff, and premium product, a luxury brand might be worth the extra money. At the other end of the spectrum, some makers of attractively priced vehicles, such as Hyundai and Kia, also offer very generous warranty coverage on their model ranges.
The dealer upsell person may also try to heap on undercoating, fabric protection, and paint protection. New cars are made of galvanized steel and need only a good blast underneath at the car wash to get the salt off if you live in the Rust Belt. Scotchgard costs only a few dollars a can, and you can spray it on the seats yourself for free. Many vehicles already come with this protection from the factory. Likewise, you can apply wax in your driveway. The space-age miracle polymer stuff a dealer puts on won't last any longer than conventional wax, no matter what they tell you.
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