Doubts about the value of car sale add-ons

repairing a car

Car buyers are being advised to exercise caution before agreeing to purchase ‘after sale add-ons’ and to get multiple quotes before accepting any finance offered by motor vehicle dealers.

The advice follows a recent increase in complaints to Consumer Protection about the ‘extras’ sold at the point of sale of a vehicle which can include an extended warranty, rust proofing, paint and fabric protection and window tinting.  Consumers are often not aware of the general market price for these items and can think that they have little alternative but to purchase at that time.

Acting Commissioner for Consumer Protection David Hillyard said some extended warranties being offered for sale have some restrictions and conditions that the purchaser may later find unacceptable.

“These extended warranties can require that the servicing of the vehicle be carried out at the seller’s premises, leaving the buyer without the choice of servicing the vehicle elsewhere at perhaps a cheaper price, and missing a service could void the warranty,” Mr Hillyard said.

“What exactly the extended warranty covers may vary and there is usually a long list of exclusions. In new vehicle purchases the usual warranty offered by the manufacturer is normally quite sufficient and, after that, Australian Consumer Law guarantees about the quality of the vehicle will still apply.

“Expensive car care packages relating to rust proofing, window tinting as well as fabric and paint protection need to be considered carefully.  You might ask yourself why the manufacturer is not providing this product with their vehicle.  In most cases the simple answer is that the manufacturer does not believe that the vehicle requires these additional products.

“In any event, if consumers do not shop around, how do they know they have bought at a good price or if they are getting value for money from the packages being recommended?

“Also bear in mind that these “extras” are added to the original price of the vehicle and will add to the financing costs and stamp duty paid on the total cost.

“Buyers should also shop around for the best interest rate for car loans which may be on offer.

“In one recent case brought to the attention of Consumer Protection, a young man agreed to after sales add-ons valued at $14,000, even though the car purchased was only valued at $7,000. The deal was structured into a car loan with an annual interest rate of 24 per cent, three times more than the market rate.

“Car buyers need to question the value of the add-ons being offered and consider if they are really needed and will add value to the vehicle, not just add to the cost.”

General information about buying cars is available on the Consumer Protection website and enquiries can be made by email or by calling 1300 30 40 54.

This article has been republished from the Western Australia Department of Commerce website, available here.