Car buying add-on products explained

When buying a car from a dealership you are often presented a number of add-on products that you may not have thought about before.

Car buyers often feel pressured to commit to buying a product on the spot, and although some add-ons are handy, others are less so. Researching each product before stepping into the dealership can go a long way to help cut down costs of owning a car.

If you see a product that could benefit your needs, shop around.

Products are typically cheaper online and often come with better terms, but always make sure to check the policy restrictions as you may find that saving money on a policy is useless when you will never be able to claim on it.

Here we run through a list of add-on products that are regularly offered by dealerships.

Service Plan

A service plan covers the cost of having your car serviced. You will often find that some plans included MOT costs or offer discounts on MOT costs. Monthly payments are made, normally over two or three years. Some plans will not fix any problems found during the service, instead only covering the schedule of service tasks required by your car manufacturer. Service plans do no offer insurance against potential risks, instead it offers the option to pay in instalments for your servicing rather than paying the full amount when it arises.

The cost of parts and labour included with the service plan are often fixed at the current prices, this is so sudden charges in the market won't alter how much you're spending on keeping the car healthy. There is the concern that with fixed-price plans, most do not include consumable parts such as pads or discs, because these parts can cost more from a dealer than an independent garage.

Typical prices are £15-16, but it depends on the brand or whether you buy from an independent garage.

Extended Warranty

New cars come with a manufacturer's warranty meaning you are insured against the cost of fixing mechanical failures and defects, often lasting until the car is three years old. An extended warranty, however, provides cover for cars after that standard warranty has ended.

This add-on product is ideal for those who are concerned about the cost of mechanical failures and defects, but remember to thoroughly check what is included and excluded. If your car is prone to faults then check what the average cost of repairs would be via owner message boards such as parkers.co.uk. Check whether prices for extended warranty are cheaper online before going with the dealership.

A sample price for extended warranty for a Ford Focus 2012 999cc would be £250-370 for one year, £280-670 for two years, and £300-945 for three years.

Service Plan

Breakdown cover is a popular add-on product that covers you against the cost of your car failing to operate, and covers you if your car breaks down at or near your home. The cost of recovering your vehicle to a destination of your choice, and providing a hire car can also be included in the plan.

Older vehicles will benefit more from breakdown cover, alongside those who find themselves driving more at night or in remote areas, commuters and families. Policies can often spring surprise exclusions so always check the terms and conditions otherwise you could find yourself left in a bit of trouble - exclusions can range from limited number of call-outs, weight limits, and faults due to human error.

Costs depend on whether your car is new and reliable or older and less reliable.

Excess Insurance

Excess insurance covers the cost of any excess that is left on your other insurance policies such as motor insurance. Acting as an extra level of insurance protection, excess insurance covers the cost of your excess if you make a claim. Excess is the amount that you must pay to your insurer as a result of making a claim.

It comes as two types of excess insurance: single and lifestyle. With single, the excess on a single insurance policy is covered, whereas with lifestyle, several excess including home travel and medical insurance are covered.

Costs will depend on how many years cover and amount of claim limit is needed, but typically cost between £17-21 per year.

Key Insurance

With key insurance you will be covered if your keys are lost or stolen, meaning locksmith charges, new locks and replacement keys are insured. Key insurance can be included in fully comprehensive motor insurance.

There is a wide variety of levels of cover with policies that offer key insurance, and some policies include car hire if you find yourself stranded or you are unable to use your car as a consequence of losing, breaking, or having your key stolen. Watch our for nasty exclusions such as keys not being considered irrecoverable until lost for at least five days.

Often a basic level of key insurance is included as part of your car insurance policy, but for a higher standard it could cost you between £20-30.

Tyre Insurance

Tyre insurance pays for the repair or replacement of tyres that are either damaged maliciously or in an accident. Malicious damage can involve kerbing, puncture and pot hole damage.

With long journeys vehicle tyres are often suspect to a high risk of damage as a result of exposure to debris, and damage roads. But that's not to say that damages can only occur then, as they can happen when you least expect it to.

Costs depend on the size of the tyres.

Alloy Wheel Cover

Alloy wheel cover pays for the repair of your alloy wheels if they are damaged either in an accident or maliciously. Contributions towards replacement alloys can be offered if the alloy cannot be repaired.

This insurance could prove to be an attractive add-on product for those who aim to maintain the cosmetic appearance of the car, as well as the value. This cover can often be combined with tyre insurance.

The more the policy is prepared to pay per repair, the higher the cover will cost will be.

Scratch and Dent Cover

This cover pays for the repair of minor damage such as scratches, scuffs, stone chips and small dents to the car, but not significant damage.

Sometimes referred to as cosmetic car insurance, this cover allows the owner to have peace of mind if the car suffers minor damage, as paying for the repair can often prove costly. Watch our for policies that exclude cars over five years old, chips exceeded certain sizes and specific paint finishes.

The cost of this cover is cheaper than paying for repairs but still high, and can typically be around £200-250 for three years cover.

Paint Protection

Paint protection is a different kind of cover as it is a treatment that protects the car paintwork against damage from salt, UV and road grime, keeping a high gloss finish on the car.

The treatment doesn't ensure that it stays scratch-free for life as there is no complete way to avoid scratches, scrapes and dents over the car's entire lifetime. However, paint protection often proves popular with first time buyers.

This costs can often reach heights of around £300.