The Addendum Sticker Car Dealer Scam
The vehicle addendum sticker scam may also be called the “Dealer Add-on Sticker scam.” It is an additional profit maker for the dealership and works very well.
The addendum sticker is an additional sticker created by the dealer that coordinates with the look and feel of the manufacturer’s suggested retail price ( M.S.R.P. ) sticker.
What is a Vehicle Addendum Sticker?
The addendum or dealer add-on sticker is a dealership-created sticker that will contain various high-profit or overpriced accessories or products to add profit to the vehicle for sale.
An addendum sticker is conveniently placed beside the large Manufacturer’s Suggested Retail Price (M.S.R.P.) sticker with all the vehicle options and pricing from the manufacturer.
Some car dealers get creative with their addendum stickers and make them appear official and identical to the manufacturer stickers.
On closer inspection, you may notice that the addendum sticker’s price is much higher than the total price stated on the M.S.R.P. sticker.
This is because a dealer can add high-profit dealer-added options, market adjustments, or anything they want to add to the sticker. Additional charges on an addendum sticker can be extraordinarily bloated and should be reviewed carefully.
These stickers get added to the vehicles as soon as they hit the lot. Some of the items included on an addendum sticker may or may not have been added to the car.
Never start your negotiations from the Addendum Sticker or M.S.R.P of a vehicle!
Addendum stickers may include dealer add-ons such as fabric protection, undercoating, dealer fees, pinstripe, nitrogen, sunroofs, spoilers, market adjustments, extended warranty protection plans, or additional accessories as alarms or music systems, etc.
A sticker may often get on a car before the work is completed. If a vehicle has an addendum sticker and claims it has wheel locks and pinstripes, make sure the car has the items listed.
How the Addendum Sticker Scam Works
There are several ways a car dealer and its salespeople will use the addendum sticker to their advantage. The main goal of the addendum sticker is to add additional profit on top of the manufacturer’s suggested retail price (MSRP). These products are usually inexpensive to the dealer and excessively marked up to the customer. This is how the dealer mindset works with an addendum sticker.
The outrageous mark-up on dealer-added options – A spoiler added to a car will cost the dealer around $250 in parts and labor. The dealer will then list the spoiler on the addendum sticker for $800-$1,250 or more.
High dollar pin striping – Dealers may have their vehicles pinstriped at about $15 per car and then charge up to $175 or more to the customer.
Conversion packages – chrome or alloy wheels and tires, truck lift kits, sunroofs, and gold packages carry very high-profit margins for a car dealership.
Dealer packages – Loaner car for life, oil changes, maintenance packages, etc., are a few of the packages dealers include on an addendum sticker.
The list goes on in this area; car dealers are excellent at finding new and improved ways to overcharge you. An example would be a $2,500.00 charge for a loaner car anytime your vehicle is in the shop combined with oil changes for the life of your owning the vehicle.
Verify the car has any dealer-added options specified on the addendum sticker. Frequently, a dealer may apply an addendum sticker to the automobile before installing the item. It won’t bother the dealer if they “accidentally” charge you for something that hasn’t been put in the car yet.
What Items Can Be Found on an Addendum Sticker?
Fabric Protection, rust proofing, and undercoating – Dealers may charge anywhere from $400 to $1,500 for protection packages that are already completed by the factory and come standard with the car.
Extended Warranties and pre-paid maintenance packages – These items are considered backend products and optional. Some dealers will still try and include them within the price of the car. They should not be included in the price and should be your choice to buy them or not.
Market adjustments and additional dealer mark-up fees – These are bogus fees. A market adjustment is just an added fee generally because of the popularity and demand of a specific vehicle. These fees are usually associated with new cars arriving on the market.
My advice is to let the “NEW” wear off before paying a premium price for any new car.
I remember when the Chrysler PT Cruiser first came out years ago. You would see dealer-added market adjustments as high as $8,000 or more over the sticker.
There was no way to get a dealer to budge on the price, and the sad thing was car buyers eagerly paid the premium price. It just shows you that if someone wants a particular vehicle, they have no problem overpaying for it.
This strategy is still relevant today. Some manufacturers have established guidelines and limits on what a dealer may charge over the MSRP.
However, many dealers have discovered workarounds and continue to tack on exorbitant market adjustment fees to automobiles that are wildly popular or in great demand.
Never Negotiate From the Addendum Sticker or the MSRP
Be careful with this very effective little trick when looking at cars on the lot with a car salesperson. Casually asking a car salesperson what the price of a new car may cost you plenty if you ask a slick car salesman the price of a vehicle.
He’ll walk you around to the M.S.R.P. Sticker of the vehicle, point to the addendum sticker price, and quote that amount to you.
Never start negotiating from the retail price!
After quoting the higher price to you, a skilled car salesman will quickly ask you another question to change the topic of the conversation. This misdirection keeps you from dwelling on the price of the car.
By quoting you a higher price upfront, he’s increasing his chances of making more profit on the car deal and raising your thinking about the price. Then changing the subject makes you forget about the cost of the car until later during the negotiation process.
How to Avoid the Addendum Sticker Scam
- Don’t ever take a car salesman’s word when he states the price of a new car. Take the time to walk around and inspect the MSRP and addendum sticker yourself.
- The addendum sticker scam can be avoided online by shopping for the best new car prices. Addendum stickers do not always include dealer-added options. Sometimes a dealer will mark up the price of a vehicle just because it’s “popular” or in “high demand.”
- The online competition will always get you the best price. Get free no-obligation new car price quotes from local dealerships in your area. Reviewing these quotes will tell you which vehicles dealers are willing to negotiate and, most importantly, which dealer is ready to give you the most significant discount to sell a car.
- Never start your negotiations with the addendum sticker price or MSRP; always determine your fair profit offer before contacting a dealer.
- Before you can determine a fair profit new car offer, you need to know how much a dealer paid for the car.
- If there are any dealer-added options on the addendum sticker, you don’t want them. Tell the dealer to have them removed along with the added cost.
- Some options may not be able to be removed, or you may want them. Tell them you will pay their cost for the options you would like to remain on the vehicle if that’s the case. These items have a list price + a parts department mark-up. They will be handwritten on the invoice or in the vehicles folder in the form of a repair order. Make sure you see the dealer added options cost in writing.