Money Essentials

Closing the deal on a new car

Don't let your guard down at this crucial moment or you might close out your savings.

The salesman may call it "doing the paperwork" or some similarly innocuous description. But the finance manager you are about to meet hopes to boost dealer profits at your expense with attractive-sounding offers of mechanical and financial add-ons. In most cases, just say, "no." But there are some exceptions.

Even if you already have financing approved, go ahead and let the dealership's financing officer give you their best offer. It may still be better than what you have in hand.

The next pitch you are likely to hear is for an extended warranty. In most cases, you'll want to pass on this. Unless you're buying a car that has known dependability issues, extended warranties usually don't pay off, according to research by Consumer Reports magazine. Instead, research the long-term dependability of the manufacturer you're considering buying from. Try to buy a car that doesn't make you feel like you need an extended warranty.

If you decide to buy one, ask when the extended-warranty coverage kicks in and what it covers. (So-called "power-train only" warranties, for instance, may exclude expensive electronic repairs common in today's cars.) Also be sure you know how long the manufacturer's warranty runs. Volkswagen and Hyundai extend power train coverage for 10 years and luxury models Lexus and Infiniti for six to eight years.

The latest vogue in add-ons (replacing rust-proofing now that almost all new cars are rustproof to start with) is security etching. Having your vehicle identification number etched into the glass on your windows may, as claimed, make your car somewhat less likely to be stolen. But it is certainly not worth the $1,100 some dealers charge.

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