Car Financing
& Insurance At The Dealership
In our previous article on
Car Financing & Insurance (The F&I Department) of your
local car dealers, we talked about how the F&I person is there to
try to sell you additional products that will help the dealer
maximize the overall profit on the deal.
We talked about the car
financing piece and some tips to consider on extended vehicle
warranties.
Let’s discuss the insurance part of the F&I department at the car
dealer.
Finance managers at car dealers will also push for you to
buy insurance policies such as gap insurance.
Gap insurance pays you if your car is stolen or
totaled and you owe more than the car is worth.
Let’s say for
instance that the difference between what you owe on your car is
$5,000 more than what your insurance is will to pay for the market
value of the car. This isn’t an uncommon situation for anyone these
days to be in with all the creative financing available to dealers.
This coupled with the depreciation rate on cars and unless you put a
good bit of money down on your car you are probably at this type of
risk. If you are, then Gap insurance would cover the cost of your
difference.
In some instances
Gap insurance could be quite appropriate for you.
However, check exactly what your insurance coverage offers you. You
may already be covered or be able to add this insurance to your
current policy.
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Credit life insurance is another product that car dealer’s
finance and insurance people are responsible for selling to you.
This does what the name implies, in that; your credit life policy
would pay off your car loan in the event of your demise. You would
be better served discussing your insurance needs with you insurance
agent, not a car dealer’s F&I manager.
If you haven’t had to fend off the other dealer extra’s (extra
large profit that is) during your front end negotiations, you may
have to once in the F&I office.
I am referring to such ridiculous
items as pin striping on your car, under coating, paint and fabric
guard, glass etching and anything else they can vastly mark up and
provide little to no value.
Remember as you walk into the car dealer’s finance and
insurance department; this isn’t just a formality.
I can
assure you the car dealer doesn’t think so.
Be prepared to negotiate
and fend off even more sales tactics. Don’t let your guard down and
lose big on the back end of the car deal.
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