Stop and go: Buying a used car in 7 steps

THE DEALER ROUTE

STOP 6: You’ve wrangled a fair price for the car, but your work is not done. It’s time for the trip to the F&I (Finance and Insurance) office, where the dealership makes much of its profit selling loan packages, extended warranties and insurance, anti-theft devices and undercoating.

Experts are divided about the products on offer here -- some say they can be a bargain; others worry about rip-offs. But one crucial fact is among the most overlooked, says Tim Meenan, executive director of the Service Contract Industry Council: You can haggle. “The price of a car is always negotiable, and so is the price of the ancillary products.” Dealers, he says, pad the prices of these products, so don’t be afraid to make an offer.

Shop around for the products you’re interested in at a few dealerships, and compare prices on the Internet. Most dealers offer only a few options for any given product, but there are typically dozens available online.

As to what to buy, says Kelley Blue Books’s Nerad, “it really comes down to the individual’s pain threshold.” With manufacturer warranties increasingly long, he says, it’s often not worth buying additional coverage if there are still a few years left on the original guarantee.

THE PRIVATE SELLER WAY

STOP 6: With private sales, what you see is generally what you get. The one exception is warranties. If a used car is still under the factory warranty, the coverage applies -- no matter who owns it. Thus, buying late-model cars can be a real plus.

If the owner bought an extended warranty, says Tim Meenan, executive director of the Service Contract Industry Council, you can typically transfer it for a small fee, often about $25. That rule applies to most kinds of coverage, so ask the seller.

On that note, remember that extended warranties can be canceled for a partial refund. So if you’re selling a car with such coverage, consider contacting the provider to get some money back.