Dealer add-ons: what they are and how to spot them in the contract

Dealer add-ons such as GAP, extended service contracts, paint and fabric protection and VIN etching are generally optional. US consumer regulators say you are not required to buy them, and you can ask for the price of the car without them. The work is in finding them: they appear as separate lines on the buyer's order or inside a package.

What the common add-ons are

• GAP (gap insurance or a gap waiver): covers some or all of the difference between what you still owe on the loan and what your auto insurance pays if the car is totaled or stolen. The CFPB notes that GAP terms vary, so compare coverage and cost from different sources.

• Extended service contract (often called an "extended warranty"): pays for or performs certain repairs after you buy. The FTC calls these optional contracts sold by manufacturers, dealers or independent companies, and says one may duplicate coverage you already have through the manufacturer's warranty. Prices range from several hundred to several thousand dollars, and there may be a deductible per repair.

• Paint, fabric or appearance protection: a coating or treatment, often sold as a package with a service plan for stains, chips or dents. The CFPB lists tire, dent, paint and fabric protection packages among common add-ons.

• VIN etching (window etching): the vehicle identification number etched into the windows as a theft deterrent. The FTC lists window etching among common add-ons.

• Credit insurance: pays some or all of the loan if you die, become disabled or lose your job, depending on the policy. The FTC says credit insurance is not required by federal law, and that if a dealer requires it for financing, its cost must be included in the APR.

Others include rustproofing, nitrogen-filled tires, tire and wheel plans, key replacement and prepaid maintenance. The same questions apply.

Are they mandatory?

In the US, the FTC and CFPB say add-ons are generally optional and that you can say "No, thank you." In its business guidance, the FTC says dealers cannot suggest an add-on is required when it is in fact optional, and must not include charges for options the consumer did not agree to. That guidance rests on the FTC Act's general ban on deceptive practices, not on a car-specific rule.

What happened to the FTC CARS Rule

The FTC finalized a car-specific rule, the Combating Auto Retail Scams (CARS) Rule, in January 2024. It never took effect: its effective date was delayed during a legal challenge, and on January 27, 2025, the US Court of Appeals for the Fifth Circuit vacated it, finding the FTC had skipped a required procedural step. The FTC formally withdrew the rule effective February 12, 2026, as published in the Federal Register. The FTC Act still applies, and state laws on dealer sales also apply and vary.

Canada

Rules vary by province. In Ontario, the dealer regulator OMVIC says the advertised price must include all mandatory fees except HST and licensing, and that items such as extended warranties, protection packages, VIN etching and rustproofing are optional extras that must be listed on the bill of sale. Other provinces have their own dealer regulators and consumer protection offices.

Australia

Since 5 October 2021, a deferred sales model has applied to add-on insurance. ASIC describes it as a mandatory four-day pause between the sale of the main product (such as the car) and the sale of add-on insurance. It covers add-on insurance only, so for other add-ons, such as paint protection, check with ASIC or your state or territory fair trading office.

How to spot add-ons in the paperwork

Check each of these:

1. The buyer's order or bill of sale. Scan the lines below the vehicle price for words like "protection," "package," "plan," "etch," "shield," "coating" and "service agreement." Our line-by-line guide to the buyer's order explains the other lines.

2. A dealer addendum sticker. A second sticker next to the factory window sticker sometimes lists pre-installed items at extra cost.

3. The finance contract. Look for an itemization of the amount financed. Amounts "paid to others on your behalf" often include service contracts, GAP and insurance.

4. A combined "package" price. Several items can be grouped under one name. Ask for each item's price separately.

5. Separate forms. Each service contract or GAP product usually comes with its own enrollment form or contract. If you are handed one to sign, it is a product you are buying.

A short sample of how add-ons can be built into the price:

Sample buyer's order · Northgate Motors (synthetic; taxes and fees not shown)

• Vehicle price: $31,480

• Appearance protection package: $1,295

• Service contract, 60 months: $2,850

• Amount financed: $37,104 at 7.9% APR for 72 months

In this sample, $4,145 of the amount financed is add-ons. Because they are financed, you also pay interest on them for the life of the loan.

What to ask about each add-on

• Is this optional? What is the total price without it?

• If it is already installed, will you remove the charge?

• Who provides it, what does it cover, and what does it exclude?

• Is there a deductible or claim limit?

• Can I cancel it later? How is a refund calculated, and who do I contact?

• Is it included in the amount financed, and how much does it add to the monthly payment and total of payments?

Get the answers in writing. The FTC suggests a printed copy of the sales contract and financing agreement, since electronic signing screens may not show every term.

If an add-on appears that you didn't agree to

1. Ask the dealer to remove it before you sign, and get a revised buyer's order.

2. Compare the revised amount financed with the finance contract.

3. If the dealer will not remove it, you can leave and shop elsewhere. OMVIC gives the same advice for Ontario buyers.

4. If you already signed, read the product's own contract for cancellation terms. The CFPB notes that certain add-ons may be cancelable for a refund.

5. US buyers can report a dealer at ReportFraud.ftc.gov. In Canada, contact your provincial dealer regulator or consumer affairs office. In Australia, contact ASIC or your state or territory fair trading office.

Whether an add-on is worth it depends on your car, loan and existing coverage. This guide does not recommend any product.

Find every add-on in your own paperwork

EasyToDecode is launching soon. It will read your buyer's order and finance contract, quote each line that looks like an add-on, flag anything listed without a price or terms, and prepare questions to send the dealer. See how it works or join the waitlist to hear when it opens.