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.
Dealer added options may include, but are not limited to, pin-stripe, vin-etching, graphics, wheel locks, gold packages, sunroofs, spoilers, ground effects, chrome wheels, fuzzy dice, and curb feelers.
Dealers will sometimes charge extra fees for paint sealant, rust proofing, or fabric protection also. These types of extras have already been added to the vehicle at the factory. Dealers will still add an additional fee to the vehicle even though they didn't actually do the work. They do this in hopes the buyer of the vehicle will not catch it and pay for it.
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, you would not believe how many car buyer's pay it every day!
What are Dealer Added Options?
A dealer added option is anything a dealer installs on a vehicle that did not come from the manufacturer. These options do not have to be approved by the automaker and they're normally not covered by the manufacturer's warranty.
Dealers can decide which accessories they want to install and can even set the prices themselves. The price of the additional options are 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 the vehicle available for sale to public.
Examples of high profit dealer added options are pin-stripe, nitrogen, pre-paid maintenance packages, vin-etch, locking lug nuts, and custom graphics.
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 original price of the vehicle.
Car dealers will attempt to charge car buyers for pre-installed extras that have been performed from the manufacturer. Some of these items would be fabric protection, paint sealant, rust proofing or undercoating. Do not fall for these kinds of pre-installed extra scams. The factory performs these added options and you should refuse to pay for them!
Any dealer added options added to a vehicle would be listed on the vehicle's addendum sticker. This is a sticker normally located right beside the M.S.R.P. sticker. Read my article to learn more about the Addendum Sticker Car Dealer 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 really popular model. Since it's a popular model there will be many customers wanting 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 car. This can add anywhere from a couple hundred dollars to a few thousand dollars to the original price of the vehicle.
These pre-installed extras have a huge mark-up by the car dealer and will add extra profit to the car deal and help make the car salesman a nice commission.
How the Scam Works with a Car Dealer's Advertising
A very common dealer added options scam is used with a car dealers advertising program. This is when a dealer advertises a really low price or payment on a vehicle in its 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 title of the ad says, "Big Sale, Today Only" across the top of it..
Excited, you take off to the dealer, hoping they haven't sold the car already. You look at the car, 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 beat him at his own 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 advertisement.
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 to the vehicle in the advertisement. The dealer added options increased the vehicle's price an additional $3,500.
The vehicle you thought was $2,000 cheaper is actually $1,500 more expensive than others advertised. The dealer's advertisement did its job and got you to come to the dealership. Learn more about deceptive car dealership advertising Click here to learn more about deceptive car dealer advertising.
How to avoid the Dealer Added Options Scam
- Don't ever take a car salesman's word when he states you 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 online from dealerships in your local area. You can also use these quotes to play dealers off each other. Read my section on how to negotiate with dealers by email to learn this very powerful technique.
- 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 same cost.
- Do your homework first before contacting a car dealership. Decide on the vehicle you want to buy and figure the car dealer's true new car cost before making them an offer.
- Never start the negotiation process from the addendum sticker price or MSRP of a vehicle. Always calculate your own fair profit offer to present to the dealer when buying a new car. Read my section to learn how to figure a fair profit new car offer on any 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 actually 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 cost for the options you would like to remain on the vehicle. These items will be listed at cost + 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 hand written 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. If something doesn't seem right you will have to ultimately decide if you want to buy the car or not.
Familiarize yourself with more car dealer tactics here.
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