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How to Spot Car Dealer Add Ons

by Autobytel Staff
May 20, 2011

When the prices of the cars themselves can’t be raised, that’s often when car dealer add ons hit a new peak, as dealers turn to fees and other sneaky charges in order to keep the doors open. Car dealer add ons tend to show up in two places: on the sales floor, as part of the car’s price, and in the finance office, slipped in amongst the numbers on the final paperwork.

Fees and car dealer add ons tend to creep up on slow-selling models, and sometimes seem counterintuitive. Delivery charges on luxury imports, for example, are often lower than comparable fees on domestically built models.

Car dealer add ons are often listed on a sticker alongside the manufacturer’s official window sticker, known in industry terms as the supplemental sticker. It’s strategically placed next to the window sticker so that it looks more official, which means fewer people are willing or observant enough to ask questions. The supplemental sticker is also phrased carefully to avoid challenging commentary from customers. It describes the dealer options and accessories that have been installed on the car, along with the prices.  These can range from official parts for the car (such as optional alloy wheels, factory body kits and other such dress-up bits from the manufacturer), to dealer-installed accoutrements like pinstriping, window tint or security systems, to overpriced services like interior sealant packages (which are simply an application of mass-market fabric protector, featuring a dealer markup and service department labor rate). Assume about a 50 percent markup on car dealer add on accessories, though many items generate even higher profits for the dealership.

A paint protection package can’t be proven to be much more protective than a regular coat of car wax. Rustproofing is redundant – cars are built to withstand rust. Any car will rust over time, but by then, the dealer’s rustproofing will have long since worn away. But not all of these products are actually rip offs, though buying them still requires diligence. If the car dealer add ons and manufacturer accessories are actually appealing (many accessories are popular ways of distinguishing a new car, and of a quality that is worth the money), always make sure to check the dealer’s “installed” rate against the manufacturer’s MSRP, which should be available in the parts and accessories department. Don’t be afraid to point out any discrepancies in pricing and ask for adjustments.

Some sales lots will play with car dealer add ons more than others. One popular trick is to take a sought-after car, especially if it’s the only one of its kind on the lot, and load it up with add ons. Potential customers who are smitten with a particular combination of model, trim level and color will have no choice but to pay the dealership’s excessive fees, even if the car dealer add ons are completely unwanted. That might signal it’s time to head to another dealership, and see if these tactics are more acceptable – or more negotiable – elsewhere.

Always ask for an explanation of any terminology that isn’t perfectly clear. Car dealer add ons are often given important-sounding names to increase the perception of their value. If the car dealer add ons are truly unwanted and unnecessary, tell the salesperson, and negotiate as if they weren’t even there. Don’t factor the charges into an offer.

Many more car dealer add ons and extra fees materialize in the finance and insurance office, where car buyers tend to think they don’t have a choice but agree. This couldn’t be farther from the truth – the price of the car has already been negotiated, so stand firm.

The finance sales staffers use a strategy called menu selling to present financial car dealer add ons. As the paperwork’s being drawn up, customers are often asked to choose a warranty and insurance package, making them feel as if buying one of the packages is mandatory. It’s not. Keep in mind that opting out is a valid off-menu selection, and so is negotiating a la carte prices if only one or two of a packaged service is desired.

Identification services, theft tracking and recovery are often not worth the money, since they are not as reliable as the dealership claims. Ultraviolet coding, aftermarket security systems and tracking devices are redundant at best and ineffective at worst. VIN etching is one of the few security services that is standardized across dealerships and different locations, but it’s really only useful on a vehicle that is likely to be stolen for the purposes of dismantling it, and is worth the effort of tracking down. Even then, VIN etching is often available at local police departments for less than the dealership’s cost (although it’s notorious for being one of the car dealer add ons that the sales manager deems “mandatory” on every car on the lot).

Taxes, title fees, and registration fees are all legit, and so is the manufacturer’s destination charge (which is not a car dealer add on, but is passed on directly from the automaker to cover the cost of getting the car from the factory or port to the dealership – almost all manufacturers charge such a fee). These should be factored into the car’s price, though, so keep an eye out for duplicate fees appearing in the final paperwork.

Some fees, like documentation, are annoying but may actually have merit if they’re not excessive. It doesn’t hurt to ask for the documentation fee to be removed, unless it will cause negotiations to turn sour. Be especially wary if charges like prep fees and advertising fees find their way into the final paperwork. They’re generally regarded as the dealership’s cost of doing business, and should not be itemized and tacked onto the price of a car. Also make sure the dealership does not add its own delivery charge in addition to the manufacturer’s mandatory fee (unless the dealership located a specific car and had it transported from another dealership to make the sale).

Above all else, look carefully for discrepancies between the verbal agreement and what is reflected in the final paperwork. It’s all too easy for the dealership to claim a price increase is a simple error, but once the papers are signed, any errors are binding. Spotting car dealer add ons is really a matter of confidence. It helps immensely to understand the games and power struggles that play out across a dealership, but it’s just as important, as an informed consumer, to take the time to read and understand all paperwork before signing anything. 


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