THE WORST PART OF BUYING OR LEASING
You’ve settled on a new vehicle, but what about the warranties and all those extras?
Extended warranties. Service plans. Etching, nitrogen, rustproofing. Fabric guard, paint protection, tire program.
It’s the worst part of buying or leasing a car. Unless you’ve done a meticulous amount of homework, it’s easy to be overwhelmed by how many extra things get thrown at you. With the help of some pros — the Automobile Protection Association (APA) and a longtime car sales rep — we’ll tackle those additional offers one by one.
Extended warranties: Be clear about what you’re purchasing. If your vehicle comes with a fouryear warranty and you purchase a five-year extended warranty, you’re actually buying a one-year extended warranty. Why? Like some prison sentences, they run concurrently. Maybe it’s worth it to you; maybe it’s not.
Dealers also sell warranties that are either brand-endorsed or through a third-party at the end of the new vehicle warranty, and these are not the same as a new-vehicle warranty. With all warranties, read and ask as much as you can. Ask what isn’t covered. Many have a longer coverage period for powertrain and corrosion, so find out those details. In Canada, all vehicles have an eight-year 130,000-km warranty on emission control systems (catalytic converters, oxygen sensors, etc.).
The APA says “Manufacturer-extended warranties offer the best value. The automakers limit the markup to about 35 per cent. Claims are unlimited or sometimes up to the value of the vehicle. Repairs are accepted at every dealer in Canada, and often the U.S. as well.”
Service plans: Prepaying your service is a good way to make sure you keep coming back to the dealer for maintenance. A prepaid plan can protect you against rate increases in shop rates a few years down the road, and allows you to have those service visits factored into your financing.
Nitrogen: Tires ran for a long time without it, and even if you pay to have it, the first time you put regular air in your tires you’ll be wondering why you spent money on it. There are applications for it — in the racing world particularly — but for most of us, it’s a cost we don’t need.
Etching: The theory is that etching the vehicle’s VIN onto windshields and body panels will deter thieves. The dealer spends a few bucks getting etching and stickers, you pay a huge markup for your car to be more traceable if it’s stolen.
Read the fine print if you think you might want it, but know that if the car you’re about to buy already has the etching done, you do not have to pay for it. You didn’t order it, you don’t pay.
This holds for any “extras” that have already been performed on the vehicle before you showed up. They can always sell you another car.
Rustproofing: Learn what type of corrosion control they’re offering, because they are not all the same.
The APA recommends you carefully read what you’re actually purchasing. Make sure things you’ve purchased have actually been done; the documentation should be there. Understand that to make a claim on any rust protection warranty, you have to have perforation (holes) from the inside out. That scratch or curb rash that broke the paint and led to corrosion? Not covered.
Steer totally clear of those electronic boxes they tell you will prevent rust. I believe them to be the No. 1 scam in the industry. While my sales rep tells me they’re worth it because they come with a warranty, the science is crackers.
Tire protection: Neither the APA nor my sales rep buys into this one. Read the offer details, but it probably doesn’t cover potholes or clipping curbs or tire rash. Curbs and medians are supposed to be in the road; they’re not hazards. Hazards are debris or nails. Read the fine print: if the tire is still holding air, it’s probably not covered. One exception might be run-flats. Make sure you know what it really covers.
Fabric guard: Whether you get them to do it, or you do it yourself with a couple of cans of Scotchgard, remember that after each upholstery cleaning, it will have to be reapplied.
Gap insurance: This can be useful to cover the difference between what is owed on your car and what it’s worth if it’s written off in a crash. First, however, check your insurance policy to see if you already have it, and ask your insurance company for a price to get it and compare.
End-of-lease wear and tear: This might be a good one, depending on how you drive and where you live. It’s a get-out-of-jail-free card for the dents and scrapes that can add up to a lot. Hand back the keys, and off you go. The cost is factored into your financing.