Car Dealers Big Push: Overpriced Extras

Lyle Romer Author Circle
By , Consumer Advocate
Published March 8, 2016

With March Madness upon us, now is a good time to emphasize that the full court press is as intense as ever. Unfortunately, I'm not talking about basketball defense, I'm talking about the Finance and Insurance (F&I) office extreme sales pitch. With a record February in auto sales, it's like the business managers have arrived at an all you can eat buffet where the customers are served up as fresh meat.

The Final Step in the Process

After you have negotiated your new car price, interest rate and trade-in value and start to get excited about driving home and showing off to your friends, you realized that there is one more barrage you have to encounter. You must enter the dreaded F&I office. You are told that it is just to do some paperwork so that you will relax and let your guard down.

What you are actually there for is to give them time to confuse you and trick you into buying all kinds of overpriced extras and things that you don't need. The F&I manager (sometimes called other things like business manager) has one job; to maximize the profit for the dealership.

The Menu

One of the key tools they will use to extract money from your pocket is something we simply named the "menu." They will show you a slick printout with, usually four, options that include extended warranty coverage. They don't ask you if you'd like one, they ask which one you would prefer.

It is like the family style menu system at a Chinese restaurant. There, you choose one food item from "Column A" and two from column "Column B." The difference is that instead of getting a filling meal, you end up with an empty wallet.

Below is an example of what you will see shoved in front of you. You will see four columns showing you what great products each package includes. At the bottom, you will see your total monthly payment (including the cost of your car) for each selection. Notice that they don't detail what the package is actually costing and the most expensive one is always the first one you read on the left side.

car dealership f&i office menu

You will notice how they use colors and a stepped graphical design and carefully chosen words to lead you towards the "best" package. The "basic" level is usually highlighted in red, orange or dark yellow to subconsciously warn you not to pick that level. The "best" level will be colored with a shade of green and be presented to look like it includes everything you could ever want out of life.

Where are the Prices?

The last thing they want you to see is what these packages actually cost because they are charging ridiculous prices. As we discuss in our warranty chapter, you can get an extended warranty from a reputable company like CARCHEX for a lot less than the dealer will charge. Many times the coverage will cost half as much or less through one of these companies.

All they are showing you is what your total monthly payment will be including the chosen package. It is a lot easier to sell you on "only" $80 per month than it is to sell you on paying $4,500 for a warranty. It is all part of the psychological game that they have developed over decades of practice.

"None of the Above" is a Valid Choice

One thing that you will not see on the menu is a choice for "none of the above." They make you think that you must make a selection from the choices you have been given and look astonished if you say you don't want any of the packages. They act like you are about to sacrifice your first born child. If "no" was on the menu, it would be too easy for you to pick it. They want you to feel uncomfortable and not ask if you have to buy one of the packages.

Don't feel uncomfortable, just say no. Tell them you don't need any of that stuff and don't want any of the choices. Of course, they won't give up that easily. They will put on a high pressure sales pitch and will tell you how great what they are offering is for you. One of their favorite pitches is how the extended warranty covers everything that the manufacturers warranty does. Well, you can buy coverage from another company and it will do the same thing, only it will save you a ton of money.

When you stand firm and decline the packages, they will start offering you each item one by one starting with the most expensive. They want to force you to say no as many times as possible. To make you feel even more uncomfortable, they will make you sign or initial everything you are declining like you do when you decline the extra insurance when renting a car. Don't get me started on that ripoff, that rant will come another time.

Recent Experience

By coincidence, I and one of the editors here recently bought new cars and got to experience the F&I nightmare first hand. We were both given the menu and both had to stand firm. In both cases (at different dealerships) their last ditch effort at profit was to push the road hazard protection on the tires. This road hazard protection was available for the low cost of $100 per tire.

Hold on a second. $400 for road hazard protection? That is just one example that illustrates how much they are overcharging. A tire shop will charge maybe $20 per tire for the same protection. So, the dealer is charging at least five times the normal cost.

For both of our deals, we had personal contacts with the ownership of the dealerships and that wasn't enough to avoid the F&I full court press. You can't even imagine how bad it is for a novice buyer. That is why we recommend that you read our entire new car buying guide before you ever set foot in a dealership.

Author Lyle Romer

About The Author: Lyle Romer is a consumer advocate, Founding Contributor and Vice President of A 20 years veteran of the auto industry with a high level of expertise, Lyle has been researching all aspects of the automotive sales industry.

Lyle's expertise and research played a vital role during the creation of in 1999 after years of industry research. He carefully observed every aspect of his own car buying experience as the internet began to take a foothold in the process. He also designed the site to make sure that consumers had easy access to the best consumer advocate education.

Lyle has been an auto industry insider since 1999. He also has worked with other automotive websites to help improve their offerings based upon feedback from users. He covers important industry events and gathers off the record sources while attending industry conventions.

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