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Posted in Auto Loans
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Question By
irvingq

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0 People Helped
dealer wants me to get extended warranty for lower rate?
So I bought a new car and the dealer says they only got a low rate if because of the extended warranty. I told them I didn't want it but they told me it would raise the rate making the payment the same. So does extended warranty lower your rate?

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Helpful to 4 out of 4 people

Have you been pre-approved before you went to the Dealer? Stick to the plan you had, do not let them pressure you into something you don't want or need.

You don't need the extended warranty.

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Extended Warrantee

Helpful to 2 out of 2 people

The dealership cannot change the terms of the loan based on you purchasing an extended warrantee. Those terms have already been decided by the bank when your application was submitted. Keep in mind, the bank or finance company may have made that a term of the deal in order to get approved based on the year or mileage of the car, but it isn’t very likely. The dealership also might have two lenders lined up, the one they are pushing (lower interest rate) will help them get more money out of you by selling the extended warrantee whereas the second lender might not have that listed as a condition but has a higher interest rate.
Tell them that you do not want the warrantee and that you want to see the approval conditions from the finance company. It is your right as a consumer to see what the bank wants in order to be approved for the loan. I would be willing to bet that the bank isn’t demanding the warrantee as a condition but that the dealership is just trying to bully you.
Good luck!

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