Most car buyers focus all of their defensive negotiating strategies with the salesperson. Once a price has been decided on they think, “Whew, the hard part is over, now I just have to sign the papers.” If a buyer lets their guard down at this point, they can really get taken for a ride.

Signing the documents means meeting with the Finance and Insurance (F&I) person, sometimes called a “Business Manager.” Often dealerships make more money in the F&I office than they do on the car. While it may seem like a relaxed environment, the real sharks of the industry are in the the back room. Once you have been worn down from the back and forth of “Let me talk to my manager...” and “We can only offer you this much for your trade…” they will sell you all kinds of things, most of which are overpriced snake-oil. But some of these extras might be worth your money. I am going to breakdown some of the most common add-ons you will encounter.

Almost every dealership will try to sell one of these; they are usually a waste of money. Of course, if you are buying , it might be wise. But if you are purchasing a car that has a solid reliability history, chances are you will never recoup your investment. However, if you think you might be in need of some extra coverage here are some questions to ask:

-What is the length of the warranty and how long do I plan on keeping the car?

Some “extended” warranties overlap with the factory warranty so make sure it goes into effect once the OEM coverage is over. If you are a “drive it till it dies” type of buyer it could be a good move to have coverage like Chrysler’s Lifetime Warranty, however if you know you plan on getting something new within 5-7 years, this extra expense probably isn’t worth it

- What is covered?

Is it bumper-to-bumper or just powertrain? Keep in mind that while powertrain parts are expensive, most cars don’t encounter major engine and transmission problems. Although, if you are buying something with a known powertrain issue it could be worth it.

- Can I just put the money away in an emergency fund for this?

While you might be swayed by the “it’s only an extra $15 a month...” from the F&I person, if your extended warranty is worth $3500 and expires in 3 years chances are that a new or lightly used car will not need over 3 grand in repairs in that time. I suggest just putting that money away, and at the end of the warranty term, if you haven’t used it the money is still yours.

These are really just another name for “extended warranty.” Anything that covers cosmetic stuff, like leather guard and paint protectant are usually bogus. What can be a good investment is wheel and tire plans. I bought my Mini Cooper in 04’, for $250 I purchased a 4 year wheel and tire plan. Within the first year it paid for itself; I hit a pothole and immediately got a flat and bent the rim. The rim alone was $250 and another $175 for the tire.

Many luxury car companies offered prepaid service plans for new purchases. It is important to find out exactly what these plans cover and how much it would be if you paid for them when the time comes. If you are considering one of these, call the service manager before going to the dealership inquire what the service intervals are on your car and ask how much they cost. Of course BMWs come standard with free service for 4 years, so if a Bimmer dealer tries to pull this one on you, run away.

Usually I tell my clients to “just say no to everything” because usually even if what they are offering sounds enticing, you can get it later and/or cheaper. With a little homework and a good defense you too can leave the “back room” with a good deal. If you have any other tips on dealing with these “extras” or want to add more to the list please do so in the comments.

Thanks for reading!

My name is Tom and I run I am a professional car-buying consultant, which means people pay me to help them select the right car (NO YOU CAN’T HAVE A PRIUS) and negotiate with the dealerships to get them the best price. If you have any other questions or suggestions for future posts about the car-buying process please let me know. You can find some of my other car-buying articles

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