The automakers have been desperate to get the car-buying public to buy again. And their ultralow-interest finance offerings have been their way of giving the customer a little incentive to get into the dealerships. Of course, the car manufacturers don't really feel they can afford this kind of generosity.
They're only doing it because they believe that they can make the money back. How, you ask? By upselling you for extras to be made a part of the car loan agreement.
Many car buyers, when they step into the dealership trying to talk finance deals, find that the salesmen there really wish to sell them extended warranties, insurance and other kinds of protection, all as part of the car loan agreement. The problem is that often, they don't sell these piecemeal.
They sell you a full package, the hope being that if you like a couple of the things included, you'll just give in and buy the whole job lot. They even have a name for this kind of tactic – they call it menu selling.
Have you ever tried installing free software like Basic RealPlayer and found that there is a stage towards the end of the installation process where the installation window asks you to enter your e-mail address? If you just want the software and you don't want to give him your e-mail address, there is seemingly no option that allows you to do this. There is a blank field for your e-mail ID, an Okay button and a Cancel button.
If you hit Cancel, you're afraid that it will cancel the whole installation. They're actually trying to psychologically play you into thinking you have no option but to give in your e-mail ID. Press the Cancel button though, and you find that the e-mail demand that disappears. The rest of the installation completes smoothly. Car dealers like to present those optional extras just in this way – as if they aren't optional.
No matter how much they try to play you, you just want to buy the individual products and those packages that you really need. Almost never is it a good idea to buy those extras in packaged form.
The first things you should weed out of those packages are the stuff they add in there that have nothing to do with cars – life insurance is one such thing. But if they offer vehicle-related stuff like paint protection and fabric protection, those aren't worth it either.
If the vehicle you’ve chosen is a high-theft model, perhaps stolen vehicle recovery service is worthwhile. Otherwise, it's just an expensive waste. And even if you do want any of the extras, there's no reason you should buy them as a part of your car loan agreement. You could try to see if they are available for less elsewhere.
And whatever you do, stay away from extended warranties – the ones that are supposed to take effect after your regular warranty expires. If you buy an extended warranty there, you'll be stuck with that particular dealer to keep your car in good working order. You could certainly do better searching for better deals elsewhere.
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