As you know from earlier postings we have talked about there being several potential income streams generated from the car you may potentially purchase. There is a loan itself, GAP insurance, payment protection and so on. There is even a huge mark up on paintwork protection programmes which although they are a good product (and actually work!) are still ridiculously over priced for the retail customer.
The income derived from these products as a collective is now so precious that in some cases at many dealers throughout the country, it is responsible for making more money than the car which is sold to generate these profits. This is another indicator of where the business stands at present.
I guess the reason for sharing this is that it could be that when you see cars advertised and think “wow that sounds cheap!” it is probably because it is! This can be seen as a “loss leader” designed to entice you into the showroom where the business manager will work his magic on you.
These ad-ons are generally great things to have if you can afford them as, especially in the case of GAP, we have seen several customers have their cars written off or stolen only to have to battle hard with their insurance company to get anywhere near the original price they paid. Sadly too often they end up financing the difference between the payout and the retail price themselves.
I would suggest that if the car price looks right and the trade in allowance is acceptable then have a look at the other products and negotiate on them to give you an acceptable all round package which not only gives you financial satisfaction but may allow you to completely protect yourself against almost any eventuality.
Go in ask the questions and judge it for yourself as we say in the trade.
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