What Are Dealer Options?
Buying a new car can sometimes feel overwhelming, what with the myriad of decisions you need to make. What model should you buy? Which color? What payment options are the best choice for you? And finally, the big question that can affect your bottom line significant: What optional equipment do you want on your new car?
Some of that optional equipment comes as dealer-installed options. These are accessories that the car dealer chooses and adds. Sometimes it's difficult to know when you're looking at dealer options vs. factory-installed options. Here's a hint: Take a look at the window sticker. Typically, dealer options aren't included on the official window sticker. Instead, you may find a second window sticker that lists the dealer options.
Difference Between Factory Options and Dealer Options
The name of the different types of options tells you a lot. Factory-installed options are, not surprisingly, installed at the factory. The automaker approves these options, and they're listed on the official window sticker that all new cars must carry. They're also included in the automaker's warranty. You can expect the pricing of factory-installed options to stay the same from one dealer to the next since the automaker controls the prices.
Dealer options are different. The automaker doesn't have to approve them, and they're typically not covered by the factory warranty — which makes sense since they weren't added at the factory. And pricing can fluctuate quite a bit from one dealer to another since the dealers control the prices. In some cases, dealer options are significantly overpriced, since some car dealers use them to pad their profits.
Can You Turn Down Dealer-Installed Options?
Yes, you can try to turn down dealer options. Ask your car dealer to remove them and to delete the cost from the final price. Dealers may agree — or they may not. In some cases, it's impossible to remove a dealer option (How do you remove rustproofing, for instance?). Your only choices then are either to go ahead and pay for the dealer options, to refuse to pay for an unwanted option and demand that the car dealership removes the charge for the option (which the dealer may refuse to do), or to walk away from the deal.
Are Dealer Options Worth It?
Sometimes. While there are some add-on accessories and services that genuinely add to the value of your car (including at trade-in time or when you're ready to sell your car), others are just a way for car dealers to increase their profit margins. Of course, a dealer option that doesn't add to your car's actual value can be worth it if it makes owning your new vehicle more enjoyable.
But if you are indeed concerned with your trade-in value — or with your monthly car payment — it can be worthwhile to pay attention to which dealer options are worth the money, and which aren't. Take a look at some of the most common dealer options and their value.
New car dealers offer this add-on because they can boost the price of the car by up to $1,200, but it's not necessary at all. Some automakers voice the corrosion-perforation warranty if a third party has provided a separate undercoating. All new cars now come with top-flight rustproofing installed at the factory, so you don't need it as a dealer option. Watch out for it included in so-called "environmental protection packages" that may also include paint sealant, sound deadening, and/or fabric protection.
Extended warranties can be a good deal, especially if something significant goes wrong with your car after your factory warranty has expired. But you have many options when purchasing an extended warranty, and most of them are better than buying one as a dealer option. And you don't have to buy your extended warranty if you want one when you buy your new car. You can purchase one at any time.
Check out extended warranties provided by your auto manufacturer or even through your auto insurance agency rather than opting for a dealer-provided warranty. Dealer warranties often exempt the systems in a car that are most likely to need work (navigation systems are one good example), and they can be quite overpriced.
Of course, you want to protect your new car's upholstery from becoming stained. But you can handle that yourself with a can of Scotchgard. That way, you're spending a few bucks rather than the $100-plus that the dealer is likely to charge you. And your car probably doesn't even need it, because modern vehicles typically use fabrics that wipe up quickly if you get to any spills right away.
Along with fabric protection often comes paint protection, another popular add-on sold by new car dealers. Any new car's finish should easily last five years with typical care — the length of time that most paint protection packages are guaranteed. Waxing your car regularly provides plenty of protection, and the $1,000 or more that you might spend on paint protection could be better spent on touching up any little scratches you incur over your first five years with your car.
Vehicle Identification Number Etching
Some car dealers offer this service, in which your vehicle identification number is chemically burned into one of your new car's windows. While your VIN is already available and identifiable on your vehicle, some insurance companies recommend this add-on. It may protect against auto theft or, more specifically, against the theft of your windshield. Check with your insurance company to see if they discount your comprehensive insurance if you have VIN etching. But also be aware that you can handle the etching yourself with an inexpensive DIY kit. Some insurance companies also offer this service for free.
Key Fob Replacement
If your new car comes standard with keyless entry or remote start, your new car dealer may offer you the dealer option of key replacement or key insurance. It's undoubtedly true that modern car keys and keyless entry/remote start fobs are expensive to replace or reprogram, and that many insurance policies don't cover them. However, check with your insurance company before you sign up for this dealer option, which can be pricey. They may offer coverage for a fraction of the dealer option price. And if you're primarily concerned with the possibility of getting locked out of your car, consider signing up with the AAA or another roadside assistance program.
Nitrogen in Your Tires
Yes, nitrogen seeps out of your tires at a lower rate than the standard air you pump in yourself at the gas station. It is slightly more stable under pressure as temperatures change. But unless you're prepping a NASCAR race car for a big race, you almost certainly don't need it. That extra pound of air pressure difference isn't going to affect how your tires wear or how your car handles. Save the $300 the new car dealer is charging for nitrogen, and buy an inexpensive tire gauge instead. If you keep your tire pressure healthy, you don't need the nitrogen. And even if you want nitrogen, your local tire shop is happy to fill your tires with it for only about $10.