By: Robert J. Nahoum
How Auto Dealers Use “Tire and Wheel” Warranties to Inflate Prices
If you’ve bought a car recently, you may have noticed a line item on your purchase order for a “tire and wheel” warranty. Supposedly, this plan protects you if you damage your tires or wheels on potholes or road debris. But in reality, these add-ons are often overpriced — and worse, they’re frequently used by auto dealers to pad the sale price and disguise illegal finance charges.
Dealers know that most customers focus on the monthly payment, not the total cost of the deal. By quietly adding a few thousand dollars in “protection” products like “Tire and Wheel” Warranties, they inflate the financed balance while disguising the real cost of the loan. These deceptive practices aren’t just unethical — they can violate federal law, specifically the Truth in Lending Act (TILA).
Hiding the True Cost of Financing Violates TILA
Under TILA, lenders and dealerships must clearly and accurately disclose the terms of credit, including the annual percentage rate (APR), the amount financed, and the itemization of each financed charge. When dealers include inflated or unneeded add-ons — like “tire and wheel protection,” paint sealant, or gap coverage — in the loan without proper consent or disclosure, they’re masking the true cost of credit.
These hidden costs can result in consumers paying hundreds or even thousands more over the life of a loan. And because the cost is baked into the financing agreement, it effectively increases the finance charge, even if the documents appear to show the same APR.
That’s exactly the kind of credit deception TILA was written to prevent.
Common Warning Signs of a Tire and Wheel Warranty Rip-Off
Watch out for these tactics at auto dealerships:
- You’re told a warranty or protection package is “required” for financing approval.
- The dealer rushes you through the paperwork or won’t show you a line-by-line breakdown of the sale price.
- The “tire and wheel” warranty appears on the contract even though you never asked for it.
- You notice your total price or monthly payment is higher than what was advertised.
- You only discover add-ons after the deal is done.
If any of these happen, you may have grounds for a consumer protection or TILA claim.
How Consumers Can Fight Back
At The Law Offices of Robert J. Nahoum, P.C., we help consumers across New York and New Jersey fight back against auto dealer fraud and illegal lending practices. We investigate dealer paperwork, loan disclosures, and contracts to uncover hidden fees, inflated warranties, and false representations that violate federal and state law.
If you suspect you’ve been overcharged or tricked into buying overpriced add-ons, you may be entitled to:
- Correction of your contract
- Refunds or cancellation of bogus products
- Statutory damages under the Truth in Lending Act and New York law
Find out how our firm protects car buyers and holds dealers accountable.
The Bottom Line
“Tire and wheel” warranties might sound like peace of mind, but at many dealerships they’re just a profit center disguised as protection. Dealers that roll these products into loans without proper disclosure are breaking the law — and consumers shouldn’t have to pay for it.
If you think your car dealer misled you about a warranty or the cost of financing, contact The Law Offices of Robert J. Nahoum, P.C. for a free consultation. You have rights, and we can help you enforce them.
For a free consultation about an auto‑fraud or deceptive‑sales issue, contact us at our Hudson Valley office or our Brooklyn location.
📞 Call (845) 232‑0202 or visit our contact page: www.nahoumlaw.com/contact