Some people like the peace of mind an extended warranty provides. They can be purchased at the dealership and rolled into your loan payment.
Carefully consider your financial situation and risk tolerance before buying one. Also, make sure you know how the warranty company will approve repairs and who they will work with.
What is an Extended Warranty?
When an extended warranty plan is purchased, it covers repairs and parts that would otherwise be costly if the vehicle breaks down. The cost of the plan depends on what kind of coverage you buy. Bumper-to-bumper coverage is the most comprehensive, but also the most expensive option. Other coverage plans include powertrain warranties, which cover engine and transmission issues, and corrosion warranties, which protect against damage caused by rust in areas with harsh weather.
You can purchase extended warranties from car dealerships or through third-party companies. A dealer’s warranty is typically more affordable than one from a third-party company. However, you will have to take your car to a dealership for service and may need to use specific mechanics or gas stations. Failure to adhere to the maintenance schedule or using the wrong octane fuel can void your warranty.
What are the Benefits of an Extended Warranty?
If you’re on a tight budget or want to ensure you’re financially protected against unexpected repairs, an extended warranty may be a good idea for you. Many warranty providers offer customizable coverage that you can choose based on your specific needs, including deductible and repair shop options.
Manufacturer-backed warranties often include a bumper-to-bumper policy and use OEM parts, which can increase the resale value of your car. However, these warranties don’t always cover the most common issues such as transmission or engine failures.
When comparing warranty providers, check out their customer reviews and reputation for financial stability. Also, look for a warranty that covers all major parts of your vehicle, as opposed to one that provides basic powertrain protection only. You’ll typically be able to transfer your warranty to a new owner for a small fee, but it’s important to read the fine print to ensure you’re covered before selling your car. If you’re unhappy with your extended warranty, most companies have 30-day money back guarantees and prorated refunds if you cancel within the first 30 days.
How Much Does an Extended Warranty Cost?
Similar to auto insurance, which covers damage caused by uninsured drivers or theft, an extended warranty provides a safety net for your vehicle should it break down beyond the manufacturer’s warranty. But it’s important to research and compare quotes from reputable providers to ensure you get the best coverage for the lowest cost.
Costs vary by vehicle type and coverage level. Older or higher-mileage vehicles may require more extensive repairs. Additionally, the length of the policy can impact costs—it’s usually less expensive to buy a shorter warranty.
It’s also a good idea to negotiate the price of the extended warranty, as many dealerships mark up their prices. Finally, remember that the cost of the warranty will include a down payment and deductible—similar to an insurance premium. To estimate the overall cost of your extended car warranty, multiply the price of a provider’s quote by the number of months you want coverage and add in the expected yearly maintenance costs and vehicle deductibles.
Do I Need an Extended Warranty?
If you’re worried about costly repairs after the manufacturer warranty expires, an extended car warranty can help mitigate risk. Many of the best warranties offer a convenient claims process, allowing you to choose your own mechanic and repair facility, and often include added perks like roadside assistance or rental car reimbursement.
While it may be a smart financial decision, it’s not necessarily necessary for every driver. If you drive a reliable vehicle and have sufficient savings to cover unexpected out-of-pocket repairs, an extended warranty might not be worth the extra cost.
If you’re considering buying an extended warranty, be sure to shop around and read online reviews to find the best plan for your needs. You may also want to consider negotiating the price, as dealerships tend to mark up their warranty prices from wholesale prices. Be sure to avoid rogue warranties, though, which are known for skimping on coverage and excluding repairs that should be covered.buy extended car warranty
