Negotiating Add-ons

What To Know

So you've negotiated a great price on a new car and think that guarantees you a good deal. Like other businesses, a good portion of a car dealer's profit comes from the Finance Office (or F&I Department). But as you're getting ready to sign for your new car, be sure to know what all the "add on's" mean, what they may cost, versus what you actually need.

The image below shows how much an average dealership makes in profit on the various services and protection. There is nothing wrong with a dealer making money, mind you, but it's most important for you to evaluate what the total cost will cost you.

Average Car Dealer Profit for Add-on's & Extras

Here's a breakdown of what these items cost the dealer and what you can do to save yourself money.

Breakdown of Add-ons & Extras in the F&I Dept.

Item	Cost to Dealer	Retail Price	Dealer Profit	Suggested Action
Fabric protection (scotch guarding)	$5	$300	$295	Consider it. Or, buy Scotch Gard for 9 bucks and apply yourself or a professional.
Paint protection	$10	$325	$315	Consider it. Or, buy sealant or wax for 15 bucks and apply it yourself or a professional.
Undercoating	$200	$700	$500	Not necessary. Most new cars come with warranties against rust and corrosion. Check on this, though.
Rustproofing	$50	$800	$750	Not necessary. Most new cars come with warranties against rust and corrosion. Check on this, though.
Pin striping	$30	$300	$270	It's up to you. If you want it, look for a professional at the dealership to do; or at an independent shop after you buy.
Car alarm	$300	$800	$500	This is standard in most cars. However, if buying used, you can have dealership do it or go to an independent dealer and save money.
VIN etching	$75	$200	$125	Not necessary. If you want it, buy a window etching kit and do it yourself for 20 bucks.
Lojack	$325	$800	$475	Consider this, but get prices from an independent installer first.
Extended warranty	$800	$1,800	$1,000	Not necessary, but this is a personal choice and can come in handy.
Gap insurance	$200	$500	$300	Not necessary, but this is a personal choice and can come in handy. Read more about gap insurance.
Financing	$0	n/a	a lot!	Know your credit score and find your own financing before heading to dealer at bank or credit union. Ask if they can beat it.

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