5) Understand Protection Products

Protection products for your vehicle and your credit are commonly sold with auto loans. Five of them are valuable when you understand them properly and buy them at the right price. Five of them make no sense (or cents). The key, again, is to understand your options and shop for the best deal before you go to the car dealership where they are marked up by as much as 400%.

Five to Consider

  • Vehicle Service Contracts (aka “Extended Warranties”)

  • GAP Waivers

  • Maintenance Contracts

  • Tire & Wheel

  • Dent & Ding

Five to Forget

  • Fabric Protection

  • Rust Proofing or Undercoating

  • Paint Sealant

  • Vehicle Identification Number (VIN) Etching

  • Security or Anti-Theft Systems

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Five Vehicle Protection Products to Consider

Vehicle Service Contracts 

These pay for most repairs, preventing big out of pocket expenses and preventing the need to negotiate with an auto mechanic. And they let you repair where you choose, not just at the dealership. They don’t cover routine maintenance like windshield wipers or worn out tires.  

GAP Waivers

If your car is wrecked or stolen your car insurance covers the value of the car—not the amount you owe on your loan. The difference can be thousands of dollars because your car loses value starting at the moment you buy it. GAP covers this difference, usually for a very small monthly payment. GAP is most appropriate for loans with small down payments or terms of over 60 months.

Maintenance contracts

Not so fun fact: Over 80% of motorists miss scheduled brake fluid changes. These contracts help you stay up to date with routine maintenance like oil and other fluid changes, which enhances performance and safety. 

Tire and Wheel

Drive in places with potholes or debris? Tire and Wheel protection can smooth the way. This product pays replacement or repair costs for tires and wheels due to damage from road hazards. It includes the cost of tires, mounting, balancing and valve stems, but doesn’t cover normal wear and tear.

Dent and Ding 

Dents and dings are all-too-easy to get–thanks to runaway shopping carts and careless car door flingers–but they can reduce the value of your vehicle significantly. A good Dent and Ding policy will put your car back in good shape without costing a fortune.

Five Vehicle Protection Products to Forget

Fabric Protection. Buy a can of stain repellent. It’s the same thing, only a whole lot cheaper.

Rustproofing or Undercoating. Rust issues are virtually non-existent in today’s cars thanks to advancements in factory-installed corrosion protection.

Paint Sealant. Save hundreds of dollars–and get a free workout–by rolling up your sleeves and protecting your car with a good wax.

Vehicle Identification Number (VIN) Etching. Save your money and buy a DIY etching kit for around $30. PRO TIP: Be sure to check your contract and make sure you haven’t been charged for this already by your dealership!

Security or Anti-Theft Systems. Save money and have a system installed by an auto security specialty shop authorized to work on your vehicle type.