The Dealer-Added Options Car Dealer Scam
Can They Be Negotiated or Removed?
The dealer-added options scam is also known as the “Pre-Installed Extras Scam,” car dealers will add $150 to $2,000+ to the price of a car by installing these overpriced dealer add-ons.
Knowing what these dealer-added extras are and deciding whether or not you want them before you purchase the automobile will prevent you from unforeseen costs.
What are Dealer-Added Options
A dealer-added option is anything a dealer installs on a vehicle that does not come from the manufacturer. These options do not have to be approved by the automaker and are typically not covered by the manufacturer’s warranty.
Dealer-added options might include, but are not limited to, pin-stripe, VIN-etching, nitrogen, graphics, wheel locks, gold packages, sunroofs, spoilers, ground effects, chrome wheels, fuzzy dice, and curb feelers.
Some car dealers will even tack on made-up or bogus charges for consumers to pay. They look at it like, if you didn’t do your research, then shame on you. The sad thing is that you would not believe how many car buyers pay for it daily!
There may be “dealer packages” listed as dealer-added options, also. These packages may include loaner car programs, pre-paid maintenance, or other in-house benefits with a grossly inflated price tag.
Dealers can decide which accessories they want to install and even set the prices themselves. The additional options cost is not listed on the vehicle’s official new car window sticker. Instead, they’re typically listed separately on an addendum sticker, a second window sticker that the dealer applies next to the M.S.R.P sticker.
When a dealer receives a vehicle from the factory, they may choose to install additional high-profit accessories to the car before making it available to the public.
Some of the most expensive dealer-added options are reinforced bumpers, lift kits, chrome wheels, body kits, custom truck conversions, and minivan conversion packages. These dealer-added option packages can add several thousand dollars to the vehicle’s original price.
Car dealers will attempt to charge car buyers for pre-installed extras that the manufacturer has performed. These items include fabric protection, paint sealant, rustproofing, or undercoating. Do not fall for these kinds of pre-installed extra scams. The factory installs these added options, and you should refuse to pay for them!
Any dealer-added options added to a vehicle should be listed on the vehicle’s addendum sticker. This sticker is typically located right beside the M.S.R.P. sticker.
The vehicle addendum sticker scam is closely related and can be used in conjunction with this scam.
How the Dealer-Added Options Scam Works
A common pre-installed extra scam is to add accessories to a new car that’s a trendy model. Since it’s a popular model, many customers will want to buy it.
As soon as the customer decides to buy the car, they will also have to buy the dealer-added options installed on the vehicle. This can add anywhere from a couple of hundred dollars to a few thousand dollars to the car’s original price.
These pre-installed extras have a massive mark-up by the car dealer and will add extra profit when the vehicle is sold and help make the car salesman a nice commission.
How the Scam Works With Dealer Advertising
A widespread dealer-added options scam is used with a car dealers advertising program. This is when a dealer advertises a meager price or a vehicle’s payment in advertising. Here’s an example of how it works.
You’re looking through all the dealer ads on the internet or Sunday paper. You notice a dealer is selling the car you want for $2,000 lower than any of its competitors. The ad’s title says, “Big Sale, Today Only” across the top.
Excited, you take off to the dealer, hoping they haven’t sold the car already. You look at the vehicle, test drive it, and decide it’s the one you want. You sit down to negotiate the price and find out the price is higher than what you saw in the advertisement. Good thing you brought a copy of the ad with you.
You show the ad copy to the salesman, believing you’ve beaten him at his game. The salesman calmly points out the little asterisk by the price of the vehicle in the advertisement. The asterisk by the price is a designator for the fine print, usually at the bottom of the ad.
In this case, the asterisk stands for “Price does not include DAO” (dealer added options). You’ve just become a victim of the dealer-added options scam. The dealer has pre-installed a spoiler and chrome wheels on the vehicle in the advertisement. The dealer added options that increased the vehicle’s price by an additional $3,500.
The vehicle you thought was $2,000 cheaper is $1,500 more expensive than the others advertised. The dealer’s ad did its job and got you to come to the dealership.
How to Avoid the Dealer-Added Options Scam
- Don’t ever take a car salesman’s word when he states the price of a new or used car. Take the time to walk around and inspect the M.S.R.P. and addendum sticker yourself.
- Competition between dealers gets the best price. Use the internet to get competitive new car price quotes from dealerships in your local area. You can also use these quotes to play dealers off each other by negotiating a vehicle’s price by email.
- If there are dealer-added options on a car you want to buy, tell the dealer you don’t want them and have them removed along with the added cost.
- Have the dealer disclose in writing if the vehicle has any dealer-added options, so there aren’t any surprises when you show up at the dealership.
- Driving to a dealership located in a big city just because you saw a super low price in an ad is a big mistake. If it sounds too good to be true, it probably is. All dealerships buy their vehicles from the manufacturers at the exact cost.
- Do your homework first before contacting a car dealership. Decide on the vehicle you want to buy and calculate the dealer’s actual new car cost before making an offer.
- Never start the negotiation process from the addendum sticker price or M.S.R.P. of a vehicle. Always calculate your new car fair profit offer to present to the dealer when buying a new car.
- Some dealer-added options may be permanently installed by the dealer and cannot be removed from the vehicle.
- There may be some options you may want to purchase. If that’s the case, keep in mind, “Dealer Added Option Prices are Negotiable!”
- Familiarize yourself with dealership advertising terms here.
- Tell the dealer you will pay the cost for the options you would like to remain on the vehicle. Items will be listed at cost plus a parts department mark-up. This is the maximum price you want to pay. You do not want to pay the price listed on the addendum sticker.
- Any dealer-added options added to the vehicle will be handwritten on the invoice or in the vehicles folder as a repair order. Make sure you see the dealer added options cost in writing. If something doesn’t seem right, you will have to ultimately decide if you want to buy the car or not.
About the author
My name is Carlton Wolf, and I’ve been in the car business since 1994, both retail and wholesale. I created the Auto Cheat Sheet to better educate buyers about the deceptive sales practices many dealerships use nationwide. Please understand that not all car dealers are dishonest. However, you never know who you’ll be dealing with, though. I’m willing to share my knowledge and experience with anyone who listens. Keep in mind that I’m a car guy, not a writer.
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