Car loan accessories Are worth it? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make better financial choices by offering you interactive tools and financial calculators as well as publishing objective and original content, by enabling users to conduct research and compare information for free - so that you can make sound financial decisions. Bankrate has agreements with issuers such as, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The offers that appear on this website are provided by companies that compensate us. This compensation can affect the way and when products are featured on this site, including the order in which they may be listed within the categories of listing and other categories, unless prohibited by law. This applies to our mortgage or home equity products, as well as other products for home loans. This compensation, however, does have no impact on the information we publish, or the reviews that you read on this site. We do not include the universe of companies or financial deals that might be open to you. SHARE: Maskot/Getty Images
5 min read Published September 27, 2022
Written by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers with the ins and outs of securely borrowing money to purchase an automobile. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since the end of 2021. They are passionate about helping readers gain confidence to manage their finances by providing concise, well-researched and precise facts that break down complex subjects into digestible pieces. The Bankrate promises
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We receive compensation for placement of sponsored products and, services, or when you click on specific links on our website. So, this compensation can affect the way, location and in what order items are listed in the event that they are not permitted by law for our mortgage or home equity products, as well as other home loan products. Other factors, like our own website rules and whether the product is available in your region or within your personal credit score can also impact how and when products are featured on this site. Although we try to offer the most diverse selection of products, Bankrate does not include specific information on each credit or financial products or services. Dealer add-ons often convince buyers to pay more than they originally planned. In addition, you'll have to pay interest on any additional items included within your loan. Keep in mind that while you might be offered many choices of packages but you are able to decline each one. Also, you can choose to use these car services individually if you want just one. And later, you can end any service if you decide to not need them. 1. Gap insurance Insurance that covers the amount you owe and the value of your car is. If your vehicle is damaged and stolen, gap insurance could assist you in reducing the cost. It's a good investment when you're -- if it's not already covered as part of the lease contract. The gap insurance may be worth the expense if you are getting an auto loan that is greater than what the car is worth, which could happen when the remaining of your previous car loan is added to the payment for your new car. However, it is recommended to research the costs of gap insurance from other sources before you can determine if the dealer offers the most competitive cost. Does gap insurance make sense? Purchasing gap insurance is worth the cost if it is done at a rapid rate. It will shield you from being liable for the difference between the value of your car and what you owe if the car is declared to be as a total loss. However, you must compare gap insurance before you purchase it. Banks, credit unions and third-party sellers all provide gap insurance. You never need to purchase gap insurance from a dealer, and if you find a better deal elsewhere you'll be able to get the insurance without any markups from dealers. 2. VIN etching VIN etching is the process of engraving the vehicle's identification number on your car's windshield and windows. This makes your vehicle identifiable and thus more difficult for thieves to steal, and could be easier to retrieve in the event of theft. While they may offer discounts to drivers who are equipped with this feature, you can perform the work yourself and save money. Is VIN Etching worth the cost? This isn't worth it. It is possible to get this done in an after-market detail shop or DIY it by using an online toolkit for just $20. 3. Extended warranties are added after the manufacturer's warranty expired, but generally provide less coverage. They tend to be more expensive than the most common repairs in particular when they are paired with your car loan. They are typically included in extended warranties and require the purchase of scheduled maintenance checks. The price of a service plan is usually added to your monthly car payment. What are the benefits of extended warranty the expense? Extended warranties are only useful when you anticipate owning the vehicle for a long time beyond the manufacturer's warranty but even then it's not always the right choice. Go through Kelley Blue Book and Edmunds for the expected repair cost and then compare them with the extended warranty offered by the retailer. If you are able to save for repairs while you own the vehicle an extended warranty could be an unnecessary expense. A service plan is only beneficial if you intend to use the dealership for maintenance and you are fine with maintenance potentially occurring on a less frequent basis than what the manufacturer suggests. If you choose to buy one of these plans, be sure to investigate these from other sources. You can and should search around to find the most affordable price, and you are never required to sign up for a dealer's extended warranty when buying a car. 4. Protection for wheel and tire Tires can be very expensive. Dealers provide tire and wheel protection to pay for replacement of the rims and tires when potholes, nails, or curbs harm the. But most tires carry their own guarantee. If there are any issues, you will likely still be covered with no tire or wheel protection. Are tire and wheel protection worth the expense? The cost of this extra protection is dependent on your driving style. If you live in an area that is known for its rough roads, looking into the additional security could be beneficial. It is possible to find cheaper options for equivalent coverage outside the dealership. 5. Paint and fabric protection This add-on does exactly as it sounds A coating added by dealers can put on the exterior and interior of your car to guard against damage. Some manufacturers include this with new models of cars Make sure to double-dip on this option. Is paint and fabric protection worth the cost? Fabric protection and paint are not usually worthwhile additions. While keeping your car in prime condition is essential, you can get the same results from visiting your nearby hardware retailer. Consider saving money and doing this yourself. 6. Key protection is contingent on the key you use and fob models, changing one or both of them can be expensive. But the additional cost of key protection offered by a particular manufacturer could be higher than the cost of replacing the key yourself. If you opt for key protection, compare the dealer add-on to alternatives offered by your insurance. Also, you can consider investing in the latest technology, such as Tile, to help you find your key in case it is lost. Is key protection worth it? This add-on is not worth the additional cost. It is easy to replace your key in the event that it is lost. Don't be influenced by dealers who are focused on the cutting-edge technology keys are now equipped with. 7. Credit insurance The add-on is designed to assist you in attempting to pay off your auto loan even if you're unable to. It only activates in certain situations like unemployment, disability, or death. Unlike , there is no payout for you, solely for lender. You aren't required to buy credit insurance to finance or purchase cars and so, don't let salespersons pressure on you. Do you think credit insurance is worth the price? Credit insurance may be useful in an emergencysituation, however it can cost more than creating the rainy day fund. Additionally, you might be able find the credit insurance you need through a third-party with a lower cost. In certain instances your insurance coverage you have may be enough to cover your expenses without the cost. Remember: You can say no Dealers often offer add-ons as part of a package, instead of standalone items. This method -- which is designed to increase sales of items- is often described as a "protection bundle." It's typically sold in levels like gold, silver, or bronze. Also known by the term "menu selling," the method makes it easier for the dealership to ensure the salesperson presents all of the . This strategy can make the customer feel that these services aren't available regardless of whether they are. Be aware that any additional feature you decide to add to your loan will result in interest. Keeping the added cost in mind can help you remain in the right direction when . How to cancel dealer add-ons Since each added-on service mentioned above is optional, you will be in a position to cancel them in the majority of situations. Check the contracts you signed. Review the time limits and cancellation procedures. You may have to mail or fax documents to get an amount of money back or rebate. Avoid the dealership if you can. Instead, visit the service provider and make an appointment to cancel directly with them. This is the best route if it's been longer than a couple of days since you bought your car. Documents and notes should be kept about the entire process. Cancelling add-ons can be a bit complicated and annoying, so write everything down as you complete each step. Keep track of your amount of money. It may take weeks for your refund or rebate check to arrive. If it does not be received, call and ask when you can expect your contract to be canceled and then refunded. If you have financed any add-ons via your loan, you might not be able to receive any refunds on the interest that you've already paid. However, you will be able to get the added-on removed from your loan and get a rebate on the amount that you didn't pay yet. The bottom line Vehicle purchases come with a adding up to more than the one displayed on the car's window. A smart buyer will avoid many extra charges by not purchasing expensive, unnecessary accessories. Make sure you only purchase items that are worth the money and do not spend more than you plan to. Related Articles
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The article was written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers to navigate the ways and pitfalls of borrowing money to buy cars. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are dedicated to helping readers gain confidence to take control of their finances by providing precise, well-studied information that break down complex topics into manageable bites.
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