When salesmen put you on the spot: Answering eight common questions

used carsWe call them "money moments" -- those situations when we are forced to make a money decision on the spot with those seemingly simple questions posed to us under pressure from a salesperson that tie your stomach up in knots wondering if you're really getting a good deal or just getting ripped off.

The truth is, most of the money "deals" you are offered are just a waste of your hard-earned dollars!

Here are eight money moments every one of us faces at some point, along with a comeback answer that could save you money. Read them all and the next time you are put on the spot by a salesperson, you can skip the sweaty palms because you'll already know the right answer!

1. Do you want insurance with your rental car?

You can practically see the sweat beading up on people's foreheads when the rental agent pops the question: Do you want the collision damage waiver (CDW) or loss damage waiver (LDW) options? For a daily fee, the rental agency waives the right to recover money from you if the vehicle you rent is damaged or stolen.

The rental car agency really wants you to say "yes" to this big money maker. We say, "no." Save yourself the $25 or so a day because chances are you are already covered -- most of us are.

But to be safe, before renting your next car, check with your auto insurance agent to make sure you are covered by your own basic car policy. If you are traveling on business, ask if your company's rental car policy will cover any damage. And finally, call your credit card company and see if they provide insurance on cars you pay for with that card. You'll be surprised how many do.

2. Do you want the "fuel option" with your car rental?

Ok, you've made it through the first test at the car rental agency, but don't let your guard down! Another question is coming your way: Do you want the fuel purchase option? If you say "yes," you pay for your gas in advance and can bring the car back empty rather than with the usual full tank.

C'mon! Why would you pay for a tank of gas you might not even use up? Especially nowadays with gas prices so high. What's worse, you'll pay an even higher price per gallon than if you filled it up yourself. Say "no thanks" and leave an extra five minutes at the end of your trip to gas up the car before returning it.

3. Do you want insurance coverage for your cell phone?

An estimated 50 million cell phone owners spend $5 a month on cell phone insurance. This is one club we do not want you to join.

That's $60 a year to insure a cell phone that you may have gotten for free in the first place -- or for not a heckuva lot more than the cost of the insurance. If you're like most people, you'll probably change that phone within a year or two anyway, so you don't need it to last forever.

In addition, the fine points on these insurance contracts have all sorts of exclusions and hoops to jump through before you collect. Cell phone insurance is more trouble and money than it's worth. Stick with the warranty that already comes with your phone (forgot about that, didn't you?) and save your cash for your next phone.

4. Do you want bank overdraft protection?

No! If you are in the habit of overdrawing your checking account, the first thing you need to do is change that habit. Paying through the nose for overdraft protection is not the answer.

Here's a better way: Ask your bank if they have a program that will automatically transfer money into your checking account from another account such as your savings account. This way, you avoid both the overdraft fee and the interest charge.

And here's the best way: Always know how much money you have in your account. You'll not only avoid unnecessary overdraft fees, you'll also be able to spot any errors your bank may make. And believe us, they do happen!

5. Do you want the brand name or generic drug?

This one is pretty much a no-brainer: Take the generic drug whenever it's available and your doctor tells you it's OK.

By law, a generic drug cannot look like other drugs already on the market, so certain inactive ingredients, such as colors and flavorings, may be different. But the important point is that these other ingredients do not affect the safety or effectiveness of the drug.

A generic drug faces rigorous scrutiny from the Food and Drug Administration (FDA) before it sees the light of day. So if your doctor or health provider says that you may fill a prescription with a generic drug instead of a brand-name one...why pay more? Whether you take medication daily or occasionally, the savings can be significant!

6. Do you want the extended warranty for your iPod, camera, TV, etc.?

You're standing in the checkout line with the latest, greatest consumer electronics gadget and the cashier asks, "Do you want to purchase the extended warranty for that? For only a few extra bucks, you'll be covered for three more years and we'll replace it if it breaks. No questions asked."

Sounds reasonable, right? WRONG! Extended warranties are usually nothing more than money down the drain for you and pure profit for the retailer.

Most repairs are covered by the manufacturer's warranty that comes free with the product. Yes, that warranty expires sooner, but if you've purchased a defective product, any problems will likely occur within that time frame.

Even if you skip the extended warranty and the product breaks after the original warranty expires, chances are the repair will cost about the same as the extended warranty!

7. Would you like a free 3-month trial to one of these magazines with your purchase?

You know what they say about a "free lunch!"

Ok, there is such a thing as a free 3-month trial subscription, but the negatives usually far outweigh the positives.

For instance, if it's a FREE trial, then why do you have to give a credit card number? Because in most cases that credit card will be charged when the trial ends unless you cancel. If you forget to cancel, you're locked into a subscription you may not want.

We've also heard many horror stories from people haunted by subscriptions they couldn't get out of, unwanted credit card charges (hoping that you won't notice!) and unsolicited mail from a thousand different sources.

Plus, these trial offers are often just a ploy to gather your personal information to sell you lots of other things (such as sweepstakes offers) and set you up for those pesky telemarketing calls. Thanks, but no thanks!

8. Do you want rust-proofing and undercoating on the new car?

Let's see, how can we put this? NO!

Paying $800 or more for rust-proofing and undercoating is a complete waste of money. This is just one of those tricks car dealers use to take more of your cash.

Here's what your dealer won't tell you: For the last 15 years, most new cars and tracks have been made with special steel in areas that are prone to rust problems. If the steel is scratched, it "heals" itself with built-in zinc plating. That makes rust-proofing unnecessary.

And here's the real kicker: The drilling and spraying that are part of the rust-proofing process can actually void parts of the warranty that come with your car!

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