Car loan accessories: Are they worth the cost? 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 that provide objective and unique content. This allows you to conduct your own research and compare information for free and help you make sound financial decisions. Bankrate has agreements with issuers including, but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Profit The products that appear on this site come from companies that compensate us. This compensation may impact how and when products are featured on this site, including for instance, the order in which they may appear within the listing categories in the event that they are not permitted by law for our mortgage or home equity products, as well as other home loan products. This compensation, however, does not influence the content we publish or the reviews that you read on this site. We do not contain the universe of companies or financial offers that may be open to you. SHARE: Maskot/Getty Images

5 minutes read. Published 27th September 2022

Authored by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers to navigate the ways and pitfalls of taking out loans to purchase cars. Written by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate from late 2021. They are passionate about helping readers gain the confidence to manage their finances by providing concise, well-researched and precise facts that break down complex topics into manageable bites. The Bankrate promise

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We receive compensation for placement of sponsored products and, services, or when you click on specific links that are posted on our website. This compensation could affect the way, location and in what order items appear within listing categories, except where prohibited by law. This is the case for our mortgage or home equity products, as well as other home loan products. Other elements, such as our own rules for our website and whether a product is offered in your region or within your personal credit score may also influence the way and place products are listed on this site. Although we try to offer an array of offers, Bankrate does not include details about every financial or credit item or product. Dealer add-ons often convince buyers to spend more than intended. In addition, you’ll have to pay interest on any add-ons that are included with your loan. Remember that even though you’ll be presented with many choices of packages, you can decline each one. Also, you can choose to use these car services individually if you want only one. Then, you are able to cancel any services if you decide that you do not want them. 1. Gap insurance Gap insurance between what you owe and what the value of your vehicle is. If your car is destroyed or stolen, gap insurance can help you break even on the cost. It’s a wise investment in the event that you’re in the event that it’s not included as part of the lease contract. Gap insurance might also be worth the cost in the event that you’re taking out a car loan for more than the vehicle is worth. This can happen when the remainder of your car loan is rolled into the payment for your new car. Still, it’s best to research the costs of gap insurance through other sources before you can determine if the dealer offers the most competitive price. Does gap insurance make sense? It is worthwhile to purchase gap insurance the cost if it is done at a rapid rate. It will shield you from having to pay for the amount that is the difference between the value of your vehicle and the amount you’ll be liable for if your vehicle is declared as a total loss. But you should examine gap insurance prior to making a decision to buy it. Credit unions, banks and third-party sellers all provide gap insurance. You never need to purchase gap insurance from a dealer, and if you find cheaper rates elsewhere you’ll be able to get the insurance without the dealer markup. 2. VIN engraving VIN etching is the process of engraving your vehicle’s identification number on your car’s windshield and windows. It makes your car easily identifiable and thus less valuable to thieves, and potentially easier to recover in the event of theft. Although will sometimes provide discounts for those who have this add-on however, you can perform the work yourself and save money. Is VIN engraving worthwhile? This add-on is not worth the cost. It can be completed at the detail shop in the future or DIY it with an online kit as cheaply as $20. 3. Extended warranties begin to take effect after the manufacturer’s warranty expired, but generally cover less. They tend to be more expensive than the most common repairs particularly when they are combined with your auto loan. These are typically bundled with extended warranties, and involve the purchase of scheduled maintenance checks. The cost of a service plan is generally added to your monthly car payment. Do extended warranties really worth it? Extended warranties are only useful when you anticipate owning the car well past the manufacturer’s warranty – and even then , it’s not the best option for everyone. Take a look at Kelley Blue Book and Edmunds for estimated repair costs and compare them to the extended warranty offered from the dealership. If you could reasonably save money for repairs when you own the vehicle, an extended warranty could be an unnecessary expense. The service plan is useful if you plan to utilize the dealer for maintenance and are fine with maintenance potentially being done in a lesser frequency than what the manufacturer suggests. If you decide to purchase one of these options, make sure you research them from different sources. It is possible to shop around to find the best price. Also, you don’t have to agree to a dealer’s warranty when buying a car. 4. Protection for wheel and tire They can be expensive. Dealers provide tire and wheel protection to cover the cost of replacement of the rims and tires when potholes, nails, or curbs harm the. However, most tires come with their own warranty. If there are any issues it is likely that you’ll be able to get by without tire and wheel protection. Do you think tire and wheel protection is worth the cost? The cost of this extra protection is dependent on the driving conditions you have experienced. If you reside in a region that has notoriously bumpy roads, the extra protection could be advantageous. It is possible to find cheaper options for the same amount of coverage in the market without the dealership. 5. Fabric and paint protection This is exactly as it sounds: an extra coating that dealers can put on the exterior and interior of your car to guard against damage. Some manufacturers include this with new cars So make sure you double dip on this add-on. Are paint and fabric protection worth the cost? Fabric protection and paint are generally not worthwhile add-ons. While keeping your brand new car in top condition is important, you can get similar results by making visiting your nearby hardware retailer. Consider saving money and doing this yourself. 6. Key protection depends on the car’s key and fob types, replacing either or both can get expensive. But the additional cost of key protection offered by a company could be more expensive than replacing the key on your own. If you decide to purchase key protection, look at the dealer’s add-on options offered from your insurance. Also, you can consider investing in technology like Tile to assist you in finding your key in case it is lost. Is key protection worth it? It’s not worth the extra money. You are able to easily replace your key in the event that it is lost. Don’t be influenced by dealers who are focused on the latest technology keys today have to offer. 7. Credit insurance This feature is designed to assist you in attempting to pay off your auto loan even if you’re unable to. It is only activated in certain situations such as unemployment, death, disability, or disability. As with other insurances, there’s no compensation for you, it’s solely for lender. You aren’t required to buy credit insurance to finance or purchase an automobile Don’t let salespersons insist on selling you to buy. Do you think credit insurance is worth it? Credit insurance may be useful in times of need, however it can cost more than creating the rainy day fund. Additionally, you might be able find credit insurance through a third party at a lower rate. In certain cases the insurance you currently have may be enough to cover your expenses with no any additional expense. Keep in mind that you can say no Dealers often offer add-ons as a package instead of stand-alone products. This strategy — designed to make more sales -is typically described as the “protection pack.” It’s typically sold in various levels, including gold, silver, and bronze. It’s also known in the industry as “menu selling” the method makes it easier for the dealer to ensure the salesperson presents all the . This strategy can create a feeling for the customer that these services aren’t optional regardless of whether they are. Remember that any add-on you decide to add to your loan will cost interest. Keeping the added cost in mind may help you stay solid when . How do you cancel dealer add-ons Since each added-on service mentioned above is optional, you will be able to cancel them under all circumstances. Examine the contract you signed. Check the time limitations as well as cancellation policies. It is possible to mail or fax documents to get the refund or rebate. Do not visit the dealership if are able to. Instead, visit the service company and cancel directly with them. This is the best option for if it’s more than a few days since purchasing your car. Note down any documents and notes regarding the entire process. The process of cancelling add-ons is often complex and stressful, so write everything down as you complete each step. Stay on top of the amount of money. It may take weeks for your refund or rebate check to come in. If it doesn’t, follow up and ask when you can expect your contract to be cancelled and then refunded. If you have financed any add-ons through your loan however, you may not receive an interest refund for the amount that you’ve already paid. However, you may be able to have the added-on removed from your loan and receive a reimbursement on the amount you didn’t pay yet. The bottom line: Vehicle purchases are subject to a greater amount than what’s advertised on the car’s window. A smart buyer will save money by avoiding costly, unnecessary add-ons. Make sure you only purchase items that are worth the money and don’t spend more than what you want to. Related Articles


This article is 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 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 dedicated to helping readers gain the confidence to manage their finances by providing concise, well-researched and well-researched content that breaks down otherwise complex topics into manageable bites.

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