Believe it or not, there are ways to improve your car deal even after the ink is dry on the sales contract.
While you can’t lower the price of your car, you can usually cancel the extras you might have felt pressured to buy in the finance office. You can also shop for a lower interest rate and cheaper insurance.
As a result of the pandemic and related supply chain problems, dealers have fewer cars to sell. Demand for cars is high, so they’re loading each sale with extra products.
“I’ve seen as much as $6,000 of crap added to a Honda Civic” sale, says Christopher T. Smith, a California attorney who handles auto-related complaints for the firm of Glassey Smith — and a former car dealer himself. “Many people sign without reading the contract and only find out about them when they get home and read the contract.”
You may very well have read the contract and signed anyway, as many dealers make these extras a condition of sale.
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Common add-ons are the extended warranty — sold for between $2,000 and $7,000 for luxury cars — and gap insurance, costing as much as $1,000 at a dealership but available elsewhere for about $200, Smith says.
Most insurance products — extended warranties, wheel and tire coverage, “protection packages” — can be canceled, Smith says. Other add-ons are in a “gray area,” such as alarms and maintenance plans, and will be more difficult to cancel or have removed from the car.
1. Request a refund
Most people finance their car so the extras are built into the loan, says Matt Jones, marketing director at TrueCar. Therefore, if you’re able to remove additional products, the refund is deducted from the loan balance. Your monthly payment doesn’t go down, but you pay off the loan more quickly.
If you cancel within 30-60 days, you’ll receive a total refund. If you wait longer, there might be a small processing fee and the refund will be prorated.
Before canceling an extended warranty, Jones says to “give it a good long thought.” The warranty is transferable and will sweeten the deal when selling to a private party. But if the warranty hasn’t expired and you’re going to trade in your car, cancel it “so you don’t leave any money on the table.”