Let me tell you a little secret. Most car dealers make their money from selling you a shiny new (or used) automobile but they often make more by selling you extra stuff. Known as second or third gross, this can be anything from Bluetooth kits to extra warranties – and I’m here to tell you which ones to consider.
Gross what?
OK, so “gross” implies profit and first gross is obviously the money they make off the vehicle. New or used, most dealers will have a bit of (profit) margin in hand but you’d be surprised to learn that sometimes they rely on second or third gross (profit) to make a deal.
Second gross
Second gross is anything physical you can add to a vehicle, like an audio/media system, hands-free Bluetooth kit, window safety film or tinting, aftermarket sunroof, wheels, seat covers, etc. If you can touch it, it counts as second gross stuff. The majority of these are a good idea, if not a matter of taste, and make the dealer some extra money.
Media, audio and hands-free systems
If, like me, you enjoy good tunes while driving, this is a good investment if the vehicle has none, a poor or rather outdated system. Adding a hands-free / Bluetooth function is also a great idea, especially for safety and resale purposes. Make sure everything is installed by a professional!
Window safety film
If you live in southern Africa – especially a big metropolitan area – then this is an almost essential addition to your new vehicle. In essence, this is a thin but durable layer of plastic which gets professionally applied to all side windows to prevent them from smashing when being hit.
N.B.! This film does not make your windows impenetrable or bulletproof!
A determined criminal (or one with enough time) can still make their way past this barrier but at least this safety film protects you and your car’s interior from quick “smash and grab” attempts. You also get the choice of adding a tint from clear, mild, dark to very dark.
Aftermarket sunroof
Eyyyyy, I’m not too sure about this one. Although I’m a big fan of sunroofs, I’d shy away from those which didn’t come with the car. If it’s a comparably cheap automobile, I say go for it. But on a demo luxury German sedan? I’d rather keep shopping until a car with sunroof pops up.
Third gross
Right, these items are non-physical items which can be sold with a car (so it’s the stuff you can’t touch or see) like insurance policies, extra warranties, paint and/or dent protection plans, payment shortfall protection and any other paperwork or insurances you can think of.
Paint and/or dent protection
Stay away, this is (extremely often) just a poorly-conceived way of taking your money. My wife got some “premium paint protection and care package” with a pre-owned vehicle purchase and when we asked them to freshen the car up before selling it, they sent a man in a van.
He spent no more than an hour buffing a few small scratches out and dabbing some touch-up paint into stone chip marks. In other words – all of which we could have done ourselves. My suggestion is to rather budget or save up for a professional touch-up of your vehicle.
N.B. Should you wish to trade in your car with a dealership, certainly clean it as best you can but don’t invest too much time or money in paint / body / wheel / interior refurbishments as dealers tend to have better and cheaper contacts to have recon (-ditioning) work done.
Mechanical warranties
I once bought an expensive German car which had just run out of motorplan – an otherwise idiotic plan if it hadn’t been for the additional mechanical warranty I purchased with it. In the two years it was valid, the warranty paid for two repairs costing twice as much as the policy itself.
There are a few things to consider though. Firstly, some manufacturers offer extensions of the existing vehicle warranty and/or service plan but be sure to calculate your intended annual mileage, usage, etc. as the costly OEM warranty may not be worth it.
My advice is to shop around (Motorrite, Hollard, etc.) and get some professional advice – a dealer’s F&I (Finance and Insurance agent who signs you up) can explain the differences and guide you towards the right cover… in most cases bronze, silver, gold plus booster warranties.
Wear-and-tear items like tyres and batteries are usually not covered but expensive stuff like turbos, gearboxes and engines certainly are; depending on which level of cover you chose. These warranties are subject to approval and usually limited to vehicles no older than ten years.
Life / death / credit insurance
From a car dealership? If you’re considering one of these products, you may need to re-look your financial situation and overall life choices. If you think you may be unable to meet the monthly instalments of that new car, may I suggest looking at a cheaper one?
good topic