Extended Car Warranty: Do You Really Need One
Sitting in a dealerships business office as you sign off on your new car purchase is not the time to be wondering, Do I need an extended warranty?
Opting for the extended warranty largely varies depending on your personal needs, but it can be a great way to keep you protected from unexpected repairs or maintenance on your car. Saving money in an emergency might be worth the extra cost of the warranty.
Arming yourself with some research on those extras before heading to the dealership to buy will not only save you some money but will also keep you from regretting decisions you had to make on the fly.
Heres what you need to know, what you need to ask yourself, and what you need to find out about extended warranties before going to the dealership.
What Does An Extended Car Warranty Cost
When you buy a car from a car dealership, often, the dealer will ask if you wish to purchase an extended warranty with your vehicle purchase.
Oftentimes, dealerships will mark up the cost of extended warranties in order to make a profit. Consider negotiating with your dealer to lower your overall or monthly payment and always check to see what independent providers have to offer.
The coverage options for extended warranties vary greatly. Your final cost is determined by plan coverage and your make and model of car. Typically, upfront costs are between $1,000 and $3,000, including interest, a deductible and other fees.
Deductibles will be charged in one of two ways, either per repair or per warranty service visit. Determining how your deductible works is important, especially if you need to take your car into a repair facility. Some problems cannot be fixed in a single trip to the repair shop, and, in some cases you may end up paying your deductible multiple times for a single repair.
While Extended Warranties Are Great Investments For Many Vehicles There Are Some Instances Where An Extended Warranty May Not Be A Great Fit
Car ownership has its ups and downs. While we could list a thousand benefits to owning a vehicle, today, we want to focus on the things that arent so great. More specifically, car repair costs. Repairing your vehicle can cost hundreds to thousands of dollars, depending on what needs to be repaired. One of the best ways to keep your out-of-pocket costs down on car repair bills is with an extended warranty. Today, we will look at what an extended warranty is, what it costs, and if it’s worth having on your vehicle.
Also Check: How To Make Car Freshies
Should You Buy A Used Car Warranty
Many new car warranties only last a few years three years is the most common so if you have, or buy, a car older than this, by default you’ll need to cover the cost of repairs yourself. One alternative to this is buying a used car warranty.
Whether youve reached the end of the new-car warranty supplied by your manufacturer or youve just invested in a used car, there’s a glut of third-party warranties available to buy.
Used car warranties profess to give you financial peace of mind by taking care of the garage bill if you encounter any issues with your car, but we’ve found that many come with too-high prices and limiting restrictions.
Find your perfect second-hand car by viewing our used car reviews.
Reduce Your Risk Regardless
Universally, vehicles are machines made out of parts and components that can and will eventually wear down, break, and require replacement or repair. This is part of owning a vehicle.
No warranty will cover each and every part of your vehicle that may ever cost you money, and not all extended warranty coverage is created equal. Also, remember that the way a used vehicle was cared for and maintained by past owners is arguably a better indicator of its long-term reliability than the badge on its hood, or the country where it was built.
The gist? Though extended warranties may be money well spent, proper, regular, and timely maintenance and inspections and ensuring that previous owners have done so as well can help reduce your ongoing costs, and extend the life of the vehicle too.
You May Like: Toyota Synchrony
Best Extended Warranty Providers
Our review team has examined every leading extended car warranty companies in the industry. Weve researched customer reviews, prices, contract options and company reputations. Based on our findings, weve determined the following companies to be among the best third-party vehicle service contract providers:
Pros Of An Extended Auto Warranty
An extended car warranty, also known as a vehicle service contract, isn’t a one-size-fits-all answer to every vehicle issue, but it can come in handy if you have a surprise vehicle breakdown. The benefits of an extended warranty include:
- Financial protection if your car breaks down: Extended auto warranties cover specific types of mechanical failure. If your car breaks down, you can visit any repair shop approved by the provider for repairs, and you typically only have to pay the deductible specified by your contract.
- Customizable coverage: Depending on the auto warranty provider, you may be able to choose the specifics of your coverage, including your deductible. This can help you find a policy that fits comfortably within your budget and covers what you need.
- Peace of mind: Buying a car can be expensive and stressful. If you’ve kept up with routine maintenance on your current car, it may be smart to hang on to it as long as you can. An extended warranty can remove some fear of the unknown if one of your vehicle’s major systems or parts breaks down.
Don’t Miss: Does A Title Need To Be Notarized In Arizona
Is An Extended Warranty Worth It
Extended car warranties are worth it if you want your coverage to continue after your factory warranty expires. Without a warranty, you are left to cover repair costs on your own.
An extended warranty can also be worth it if you value peace of mind when it comes to budgeting for repair costs. You can have a built-in payment each month instead of unpleasant surprises on the road.
What To Do If Someone Calls About Your Extended Car Warranty
“Hi there, this is Shasta calling in regards to your Volkswagen warranty. The warranty is up for renewal. I’d like to congratulate you on your $1,000 instant rebate and free maintenance and oil change package for being a loyal customer. Call me back at 888-206-XXXX to redeem now. Once again, that number was 888-206-XXXX. Thank you so much. Have a great day.
You’ve probably gotten several calls, usually recorded, from a person who has been trying to reach you about your extended car warranty. What should you do?
Hang up. Block the number, if you can. It’s a scam.
That’s it. It may be tempting to talk to the scammer and read a list of random numbers for a credit card or pretend to run down to the drugstore to buy $2,000 worth of Amazon gift cards. Don’t do that. Don’t call back.
Why? Even pressing a button will let the scammer know that he has reached a real phone number, and that’s valuable to him. You’ll simply get more scam calls. Just hang up. If you think you have received a fraudulent call, file a complaint with the FTC.
Also Check: Zte Mobley Hack
Extended Car Warranty Exclusions
Below is a list of exclusions, or items and repairs that an extended car warranty doesnt cover:
- Normal wear-and-tear items like brake pads and windshield wiper blades
- Regularly scheduled maintenance like oil changes or recommended maintenance
- Damage due to misuse, abuse, neglect, or use of improper fuel or fluids
- Damage due to environmental factors, chemicals or extreme weather conditions
- Damage from theft, vandalism or a collision
We recommend that you compare sample warranty contracts and weigh the pros and cons of extended car warranties before deciding on a specific provider and plan. Sample contracts give you detailed information on what exactly your warranty would cover in case of a needed repair.
Get More For Your Money Get Guardtree
GuardTree is a comprehensive, monthly extended warranty subscription that you can cancel at any time. GuardTree provides protection from most major electrical and mechanical repairs and offers additional benefits like roadside assistance and car rental and trip interruption costs.
You May Like: How To Make Car Freshies
What Do Extended Warranties Cover
Next, you need to know what’s covered by an extended warranty. Parts that are usually replaced routinely because of normal wear and tear, such as brake pads, tires and clutches, are usually not covered. Other questions to ask:
- Who will be doing the repairs? If I break down 1,000 miles from home, will there be a nearby mechanic or dealer who will honor the warranty?
- Is there a toll-free number I can call when my car breaks down? Does someone actually answer?
- Will the repairs be made with new or reconditioned parts?
- Is there a deductible? If I get a $1,500 repair bill, how much of that will I have to pay? And is there an overall limit to how much the company will pay in a year?
- How long does the extended warranty last?
- Does the company backing the extended warranty have any complaints against it with the Better Business Bureau?
Join today and get instant access to discounts, programs, services, and the information you need to benefit every area of your life.
What Does An Extended Warranty Do
As your car gets older and you put more miles on it, certain components will inevitably begin to break down. The problem is, you usually wont know where or when. That can result in unexpectedand often expensivetrips to the car dealership or repair shop.
An extended car warranty covers the cost of repairs from mechanical breakdowns and offers coverage beyond the original factory warranty. Rather than risk paying out thousands at the dealership or service center for costly repairs, you pay a monthly premium instead.
Its important to know that not all warranties offer the same coverage. Some may only cover certain parts, like a powertrain warranty, while others offer more comprehensive coverage, like a bumper-to-bumper warranty. In addition, different plans have varying vehicle mileage and age limits.
Most third-party warranty providers offer a number of plans and payment options. You can generally choose to pay your entire premium up front or break it down into monthly payments to suit your needs.
Also Check: Colombo Car
Reasons Why Extended Car Warranties Are Worth It
Disclosure: This content was produced by an independent editorial party for the purposes of educating our customers, and is not influenced by the other business operations of CARCHEX.
Trying to decide if extended warranties are worth it? An extended car warranty can protect you from unexpected repair costs and give you coverage not offered by your original factory warranty.
You may not think purchasing an extended warranty for your vehicle is necessary. However, when your original factory warranty expires, you will be left having to pay for any expensive repair costs.
Here are five reasons that extended warranties are worth it:
Are Extended Warranties On Used Cars Worth It
An extended warranty can help used car owners keep their repair expenses predictable and manageable. But at several thousand dollars, that predictability comes at a significant cost. With that in mind, you might be wondering if extended warranties on used cars are worth it.
Weve reviewed the best extended warranty providers on the market and crunched the numbers to help you decide if an extended warranty is the right choice for you.
Best Extended Warranty Companies
To learn more about our editorial integrity policy and how we make money through affiliate partnerships, read our full disclosure here.
Also Check: How To Remove Cigarette Burn From Car Seat
They Arent Right For Everyone But They Can Provide A Safety Net
Surprise car repairs arent fun they can lead to financial stress, missed work and even high-interest debt if you have to take out a loan to pay for them. An extended car warranty can help relieve the financial problems associated with a breakdown.
While some financial experts recommend setting aside money to pay for future repair bills, this advice isn’t practical for everyone. If you have limited savings or have recently faced a major financial challenge, for instance, shopping for an extended auto warranty could be the right move.
There are two types of extended car warranties: those from the manufacturer and those from third-party providers. With both types, it’s crucial to read the fine print so you understand your coverage limits and deductibles, how to make a claim and where you can go for service.
Pros Of Extended Warranties For Used Cars
1. You don’t have to pay for costly repairs out of pocket. There is always the possibility that your car could suddenly require an expensive repair. The chances of a breakdown only increase as your vehicle ages. If you aren’t able to pay a $1,000 or $2,000 repair bill out of pocket, a reputable used car extended warranty provider will foot covered repair bills on your behalf, excluding a small deductible. Most extended warranties will even cover the cost of towing your car to a repair shop, as well as roadside assistance and rental car reimbursement.
2. You get peace of mind on the road. With an extended warranty, you can anticipate that the cost of your warranty minus your deductible is all that you will have to pay to keep your car on the road. In this way, a warranty acts as a sort of insurance for car repairs, protecting you against bank-breaking bills. For some car owners, extended warranties on used cars are worth the extra money just to have that security.
3. You can keep your used car for many years knowing it is protected. If you love your used car and want to keep it for many years, an extended warranty will help you do that by covering repair costs that might otherwise encourage you to sell your vehicle. The sooner you purchase an extended warranty, the sooner you can lock in a low rate.
Don’t Miss: How To Repair Clear Coat On Car
Should You Buy An Extended Warranty
If your new car comes with a manufacturers warranty, theres no need for extra coverage right away. But you might decide to buy one later on if your car is unreliable and you cant pay for expensive mechanical repairs.
You can usually buy an extended warranty anytime before the manufacturers warranty expires. Try to negotiate the price to get a good deal.
Be sure you understand the fine print, Gillis advises. Understand what the policy covers , when coverage kicks in, where you can get service, and the costs involved. Research the company and look for patterns of complaints, Susswein says. A good warranty should provide coverage beyond what you already have and come from a legitimate company.
In most cases, though, these policies dont make financial sense. We think youre probably better off buying the most reliable car you can, invest in maintaining it, and putting some money aside for repairs, Susswein says.
What Things Do I Need To Consider
When deciding whether an extended car warranty is worth it or not, you will need to carefully look at the terms of each policy. Warranties can be confusing to understand, so its important you understand what you would be paying for to help you decide whether it is worth getting an extended warranty.
Used car warranties typically dont offer as comprehensive cover as manufacturers warranties. They can have more exclusions and stricter terms and conditions, so you shouldnt assume that every mechanical or electrical failure your car could get will be covered.
For example, if a part of your car that isnt covered by the warranty fails and damages a part that is covered, not all warranties will pay out. This is known as consequential loss, and is one of the terms to look out for when comparing policies.
More comprehensive car warranties will cover more faults, such as some cover for wear and tear, but they will be more expensive. You would have to weigh up whether the extra cost is worth paying, or if it would be cheaper to simply pay for any repairs yourself if a problem appears.
You should also look at the claims limit of a policy – the maximum amount that the warranty will pay out for repairs – as well as the excess you need to pay whenever you make a claim. This will give you an idea of how much you could still need to pay even if you have a warranty, and so could help you decide whether it is worth paying for a warranty.
Don’t Miss: Alpena Window Film Installation Kit
The Cost Of Car Cover
Our previous research also found that many used car warranties cost more than the average repair bill for a used family car.
Most warranties can be tinkered with, but improving the package will increase the price, and once youve fine-tuned the cover to what you want you may find yourself with a plan that cant compete with low average repair costs for most used cars.
Conversely, dont be lured into a cheap deal that weasels out of coughing up your repair fees by including a list of terms and conditions as long as your arm.
A good alternative to buying a used car warranty would be regularly setting money aside for future repairs, and finding a good, local mechanic that also offers value for money. If, however, you want the peace of mind that a warranty might offer, make sure you read the small print carefully before signing on the dotted line.
You can reduce the risk of needing a warranty by choosing a car that’s less likely to need repairs. Our unique survey reveals the most reliable cars in the UK.