Car loan accessories Are they worth the cost? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make smarter financial decisions by offering interactive financial calculators and tools as well as publishing objective and original content. This allows you to conduct research and compare information for free - so that you can make financial decisions with confidence. Bankrate has agreements with issuers, including but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The products that appear on this site are from companies who pay us. This compensation can affect the way and when products are featured on the site, such as the sequence in which they appear within the listing categories and other categories, unless prohibited by law for our mortgage home equity, mortgage and other home lending products. This compensation, however, does have no impact on the information we publish, or the reviews that you see on this site. We do not cover the universe of companies or financial offerings that could be open to you. SHARE Maskot/Getty Images
5 min read Published September 27, 2022
Writer: Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in helping readers in navigating the ins and outs of securely taking out loans to purchase cars. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to manage their finances with detailed, well-studied facts that break down complex topics into manageable bites. The Bankrate promise
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You have money questions. Bankrate can help. Our experts have been helping you manage your money for over four decades. We continually strive to give our customers the right advice and tools needed to succeed throughout life's financial journey. Bankrate adheres to a strict code of conduct policy, which means you can be confident that our content is honest and precise. Our award-winning editors and journalists produce honest and reliable content to help you make the right financial choices. Our content produced by our editorial staff is accurate, truthful, and not influenced through our sponsors. We're honest about how we are in a position to provide quality content, competitive rates and useful tools to you by explaining how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services or through you clicking certain links posted on our website. So, this compensation can impact how, where and in what order products appear in listing categories, except where prohibited by law. We also offer mortgage, home equity and other home loan products. Other factors, such as our own rules for our website and whether a product is available within your area or at your personal credit score could also affect the way and place products are listed on this website. We strive to provide an array of offers, Bankrate does not include information about every credit or financial product or service. Dealer add-ons are often used to convince buyers to pay more than they originally planned. And you'll pay interest on any add-ons included in your loan. Be aware that although you might be offered various options of packages, you can decline any of them. You also these car services on your own if you wish to only one. And later, you can cancel any services if you decide you don't want them. 1. Gap insurance Insurance that covers what you owe and the value of your car is. If your car is destroyed or taken away, gap insurance could help you break even on expenses. It's a wise investment when you're -- in the event that it's not included in the lease agreement. Gap insurance might also be worth the cost when you're getting a car loan for more than the car is worth, which is the case when the balance of your previous car loan is rolled into the new car payment. However, it is recommended to investigate the cost of gap insurance through other sources first so you can determine if the dealer is offering you the best cost. Is gap insurance worth it? The purchase of 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 your vehicle is declared a total loss. It is important to examine gap insurance prior to making a decision to buy it. Banks, credit unions , and third party sellers offer gap insurance. You never need to purchase gap insurance through a dealer If you can find a better deal elsewhere you'll be able to get the insurance without any markups from dealers. 2. VIN etching VIN etching involves engraving your vehicle's identification number onto the car's windshield and windows. It makes your car easily identifiable and thus lowers the value of your vehicle to burglars and possibly easier to locate in the event of theft. While they may offer discounts for drivers who have this add-on but you can do it yourself and save a few dollars. What is the best option? VIN Etching worth the cost? The add-on isn't worth it. It is possible to get this completed at a detail shop later or make it yourself with an online kit as cheaply as $20. 3. Extended warranties are added after the manufacturer's warranty expired, but generally cover less. They tend to be more expensive than most repairs particularly when they are combined with your auto loan. are usually lumped in with extended warranties and require purchasing scheduled maintenance checks. The price of a service plan is usually rolled into your monthly car payments. Are extended warranties worth the expense? Extended warranties can only be beneficial if you expect to own the car for longer than the manufacturer's warranty and even then , it's not always the best choice. Go through Kelley Blue Book and Edmunds for expected repair costs and then compare them with the extended warranty provided by the retailer. If you could reasonably save money for repairs while you own the vehicle, an extended warranty could be an unnecessary expense. A service plan is beneficial if you intend to use a dealership for maintenance and you are okay with maintenance being done in a lesser frequency than the manufacturer recommends. If you purchase either of these plans, make sure you take the time to research the other options available. You can and should search around to find the best price, and you don't have to sign up for a dealer's extended warranty to buy a car. 4. Wheel and tire protection Tires can be very expensive. Dealers offer tire and wheel protection to cover the cost of replacement of the rims and tires when potholes, nails, or curbs cause damage to them. However, the majority of tires have their own warranty. If issues arise, you will likely still be covered with no tire or wheel protection. Are tire and wheel protection worth the cost? The cost of this extra protection is dependent on the driving conditions you have experienced. If you reside in an area that is known for its rough roads, then the additional protection might be advantageous. You can most likely find lower-cost options with similar protection outside the dealership. 5. Fabric and paint protection This add-on is exactly what it sounds like: an extra coating that dealers can add to your vehicle's interior and exterior to shield it from harm. Some manufacturers incorporate this feature in new cars, so check before double-dipping on this option. Is paint and fabric protection worth it? Paint and fabric protection are generally not worthwhile add-ons. While keeping your brand new car in prime condition is crucial however, you can get the same results from visiting your local hardware store. Think about saving money and doing this yourself. 6. Key protection depends on the car's key and fob types, replacing one or both of them can be costly. However, the cost of key protection offered by a company could be higher than the cost of replacing the key yourself. If you choose to use key protection, compare the dealer add-on to the options provided from your insurance. Also, you can consider investing in technology like Tile to help you locate your keys if they are lost. Is key protection worth it? This add-on is not worth the extra money. You can easily change your key if you lose it. Do not be deceived by dealers who focus on the cutting-edge technology keys are now equipped with. 7. Credit insurance The feature is designed to assist you in attempting to make payments on your auto loan in the event that you are unable to. It is only activated when certain circumstances occur like death, disability or unemployment. Unlike , there is no payment for you, but solely for lender. It is not required to purchase credit insurance when you finance or purchase an automobile Don't let salespersons try to convince you. Is credit insurance worth the cost? Credit insurance may be useful in an emergencysituation, however, it could be more expensive than building an emergency fund. Also, you may be able to find credit insurance through a third party at a lower rate. In certain cases the insurance you currently have might be sufficient to cover your expenses without any additional expense. Remember: You can say no Dealers often offer add-ons as part of a package, rather than stand-alone items. This method -- which is designed to sell more items -is typically advertised as an "protection bundle." It's typically sold in levels like bronze, silver and gold. It's also known by the term "menu selling" this approach makes it easier for the dealership to ensure the salesperson presents all the . This strategy can make the customer feel that these services aren't optional even though they are. Keep in mind that any extras you decide to include to your loan will cost interest. Making note of the cost in mind can help you remain in the right direction in the event of a dispute . How to stop dealer add-ons added-on service mentioned above is optional, you should be in a position to cancel them in most circumstances. Examine the contract you signed. Check the time limitations as well as cancellation policies. You may have to mail or fax documentation to receive an amount of money back or rebate. Avoid the dealership if you have the option to. Instead, contact the service company and cancel directly with them. This is the best route for if it's more than a few days since you bought your vehicle. Documents and notes should be kept regarding the process. Cancelling add-ons can be a bit complicated and annoying Make sure you record all the details as you complete each step. Be on top of the cash. It may take weeks for your refund or rebate check to arrive. If not, follow up and ask when you can expect your contract to be cancelled and then refunded. If you financed any add-ons with your loan and you didn't pay for them, you may not be able to receive a refund on the interest you already paid. However, you will be able to request that the add-on taken off your loan and receive a reimbursement on the amount that you aren't paid yet. The bottom line: Vehicle purchases are subject to more than the one displayed on the window of the vehicle. But a savvy buyer can save money by refusing pricey, optional add-ons. Only buy add-ons that you believe are actually worth the cost and make sure you don't pay more than you intend. Related Articles
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Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers in navigating the ins and outs of securely borrowing money to buy an automobile. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are passionate about helping readers gain confidence to take control of their finances by providing concise, well-researched and well-researched content that breaks down otherwise complex topics into digestible chunks.
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