While the joy of buying a new car, especially in these chaotic times, is a satisfying accomplishment, some dealers want even more from you than the sale of a car. They want to sell you extra insurance or a warranty that you don’t really need, or will ever use. So when it comes to buying from a car dealership, just say no to these three extra offerings that only add more to your monthly payments. 

What is a third-party warranty?

Sometimes dealers will call it an extended warranty or service contract. Whatever they call it, you don’t need it. First of all, you already have a warranty from the factory for a new car. It should cover everything from minor problems to catastrophic events like engine failure. And these warranties cover many years and many miles. So what is there beyond the manufacturer’s warranty would you need an extended warranty for? 

Whatever coverage you may get from a service contract is murky. Coverage and protection, in many cases, can be vague. Most are located out of state, which only adds to potential problems should you think you need them.

Another problem is that there are dealers who sell you the warranty but never complete the transaction. So they pocket the extra money and call it a day. If you were to catch them, they would apologize and say someone didn’t turn in the paperwork. But how many times do you think a dealership would forget to turn paperwork in? 

If service and warranties are important to you, get a detailed description of what comes with the factory warranty first. Then compare it, if you can, to what’s offered in the extended warranty. Look at what is actually covered, and how much it pays towards that coverage. Get everything in writing or better yet, just say no.

What is gap insurance?

There is another product that has dubious benefits. Gap insurance offers complete coverage for a totaled leased or financed vehicle. It is offered especially for those buyers that lease or finance a car.

If you buy it separately from an insurance company, it normally runs around $25 extra a month. Some car dealerships, on the other hand, charge you far more for the coverage. And as with the third-party insurance, a few dealers will keep that money and you never actually get the coverage. 

If it sounds like a product you want to take advantage of, see the costs first. What is covered and for how much money? Are there deductibles? Get everything written into your contract so you have the necessary information should you need to sue down the road. 

Should you have credit life disability insurance?

Credit life disability insurance covers part of, or all of, your car loan should you pass away or are unable to work. According to ValuePenguin, a smarter option is to just get term life insurance. It’s the cheapest type of coverage you can buy. It will cover loans and other expenses. The other thing is that credit life insurance is rarely, if ever, actually used.