The add-ons that end up inside your loan

Assumptions for every row: the product is added to the amount financed on a loan at 8% APR for 72 months, and paid off on schedule. Prices are illustrative round numbers we picked, not averages; real prices vary widely by seller, product and state. On these terms each dollar financed costs about $1.26 by the end; the financed figures below use the exact factor (1.26239…), and the monthly figure is what the item adds to each payment.

• Vehicle service contract

  Often sold as an "extended warranty," it pays for certain repairs after the factory coverage ends, subject to its own exclusions and deductible. Read what it excludes before what it covers. Whether it's worth buying at all is its own calculation, walked through in extended warranty arithmetic.

  StickerFinanced$2,400$3,029.74

  +$42.08 a month

• Gap coverage

  Covers some or all of the difference between what insurance pays on a totaled car and what you still owe. It can be genuinely useful early in a long loan with a small down payment, and pointless once you owe less than the car is worth. It may also be available through your insurer; ask before buying it at the desk. Gap coverage, and when it earns its keep shows the window when it matters.

  StickerFinanced$895$1,129.84

  +$15.69 a month

• Tire and wheel protection

  Repair or replacement of tires and wheels damaged by road hazards. Value depends heavily on your roads, your tires, and the fine print on what counts as a covered hazard.

  StickerFinanced$799$1,008.65

  +$14.01 a month

• Paint and fabric protection

  A coating or treatment for the exterior and upholstery, sometimes bundled with a limited warranty. Ask what was applied, by whom, and what the warranty requires you to do to claim.

  StickerFinanced$695$877.36

  +$12.19 a month

• Key replacement plan

  Replaces lost or damaged smart keys and fobs. Worth pricing against what a replacement key for your specific model would cost you outright, which a locksmith or parts counter can tell you.

  StickerFinanced$499$629.93

  +$8.75 a month

• Anti-theft device or package

  A tracking unit, alarm add-on or a theft-benefit warranty. Sometimes already installed on the car when you arrive, and presented as part of the price. Ask whether it can be removed from the deal, and what exactly the benefit pays.

  StickerFinanced$399$503.69

  +$7.00 a month

• VIN etching

  The vehicle identification number etched onto the windows as a theft deterrent. Ask whether it has already been done and whether it's optional; the price is worth weighing against what it would cost to do yourself.

  StickerFinanced$299$377.46

  +$5.24 a month

• Nitrogen-filled tires

  Tires inflated with nitrogen instead of ordinary air. Whatever its merits, it is a small line that is easy to overlook and easy to decline.

  StickerFinanced$149$188.10

  +$2.61 a month

• All eight

  What the full menu adds to one loan. Rows may not sum to the cent because each is rounded separately.

  StickerFinanced$6,135$7,744.78

  +$107.57 a month

Sticker priceInterest added by financing

What the second number changes

The bars are all the same shape, and that is the point. At a given rate and term, financing marks up every item by the same proportion: here, 26.2 cents on the dollar. The $149 nitrogen and the $2,400 service contract carry the same markup. What differs is how noticeable it is. On a monthly payment, a $2.61 item disappears completely, and even the whole menu, $107.57 a month, can be made to look modest next to the car's own payment. Over six years it's $7,744.78, and $1,609.78 of that is interest on things that aren't the car.

There's a second cost the rows don't show. Every dollar added to the amount financed raises the balance against the car's value, so you owe more than the car is worth for longer. Should the car go before the loan does, the add-ons you financed are part of the shortfall.

Four habits that keep the second number small

Ask for the itemization, early. The retail installment contract lists amounts paid to others on your behalf, which is usually where these products sit. The walk-through in reading a retail installment contract marks the block. If a line is there you didn't choose, ask for it to come out before you sign, not after.

Treat "required" as a claim to verify. Contracts commonly state that optional products aren't required to get financing. If you're told otherwise, ask to see that requirement in writing from the lender.

Price the product outside the deal. Most of these can be bought elsewhere, later, or not at all. Some can be bought for cash at the dealership and kept out of the loan entirely, which removes the second number and leaves only the first.

Know the exit. Many service contracts and gap products can be cancelled, sometimes with a partial refund of the unused portion, and a refund on a financed product is often applied to the loan balance rather than paid to you. The cancellation terms are in the product's own contract. Read them before buying, so you know whether "you can always cancel" means anything.

None of this makes every add-on a mistake. A service contract on a car you plan to keep a long time, or gap coverage on a long loan with little down, can be reasonable purchases. The mistake is judging them by the first number when you'll be paying the second.