“After agreeing to buy a new vehicle, I experienced considerable sales pressure to purchase dealer add-ons. I’m wondering how much profit dealers make on all those products they sell in the business office?”
—Name withheld, Alberta
The markup on these add-ons can vary. Probably the lowest-priced extra is the additional warranty offered by the auto maker, with a markup of 25% to 35%. Don’t expect to haggle on this price, as most dealers enforce the retail price of these warranty contracts. The highest markup is for nitrogen in your tires; it costs the dealer, at most, $5 per tire, but is often presented as an environmental charge. Sometimes this charge is bundled with the provincial tire recycling levy or a road hazard warranty on the tires. We’ve seen the price climb as high as $299, which is added to the final price. Generally, dealer add-ons offered in the business office are overpriced.