Globe reporter Jason Tchir reviewed a price quote from a Richmond Hill, Ont., Kia dealership that included nearly $4,500 in extras – with no explanation and no option to remove them. In the five provinces that require dealers to show all-in pricing in their advertising and on websites, the add-ons can be baked into the sales price, as long as they’re listed in the fine print.
Unless you want to be taken for a ride at the dealership, skip most of the extras – if you can, experts said.
“Many add-on products, such as [window] etching and anti-theft protection, key-fob protection, paint and wheel protection, electronic rust-protection modules … have almost no real value to consumers and are almost entirely dealer profit,” said Shari Prymak, a senior consultant with Car Help Canada, a Toronto-based non-profit organization that helps drivers find cars and negotiate purchase agreements.
Dealer extras might include treating the upholstery with fabric protector, rustproofing the vehicle or applying a clear plastic film to protect the paint from scratches. Some dealers will etch numbers – either the car’s vehicle identification number (VIN) or a tracking number – onto your car’s windows. Then they’ll sell you a plan that will top up your insurance coverage if your vehicle is stolen.
Other plans include key-fob protection (insurance to replace a key fob if you lose it) and wheel protection (which pays for damage to wheels and tires if you hit a pothole or scrape up against a curb)…
If you’d like the added protection of an extended warranty […] buy the carmaker’s extended warranty, said George Iny, president of the Automobile Protection Association, a national pro-consumer advocacy group with offices in Toronto and Montreal.
“The factory extended warranty offers good value for a luxury model or a vehicle with a poor reputation for reliability,” Iny said. “The car manufacturer limits [the amount the dealer can mark it up over actual cost] to about 35 per cent.” Dealers can inflate the prices on warranties offered by private companies as much as they want. Iny said he has seen dealer markups as high as 300 per cent on private warranties.
“If a new car dealer is pushing an aftermarket warranty they are usually motivated by greed, as the margin is almost certainly much higher than their manufacturer’s program,” he said…
’Outrageous’ markups
Dealers often pad prices for their add-ons, Iny said. For instance, $1,800 (the price the reader says he was quoted in his question) is “outrageous” for paint protection film, Iny said.
Depending on the add-on product, dealers tend to mark up prices by 200 to 400 per cent over what it costs them, Iny said..
But increasingly, some dealers are adding extras to the car whether you want them or not, Iny said.
Many dealers won’t let you turn down the extras; if you don’t want them, your only option may be to walk away from the deal. “Most add-ons offered by dealerships in this tight market are overpriced; many are unavoidable,” Iny said.
So, when you buy a car, it may come with a pricey mandatory package that includes extras such as paint protection film, mud flaps and wheel locks. Or it may include an extended warranty.
In a new national Decision Point Research survey, commissioned by Car Help Canada, of people who had bought a car in the past two years, more than 40 per cent said they were required to pay for dealer add-ons as a condition of the sale.
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