Monday, May 13, 2024

Is Car Warranty Worth It

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Do You Know You Already Have An Extended Warranty

Are Extended Auto Warranties Worth It?

Most cars come with a powertrain warranty that kicks in after the bumper-to-bumper warranty expires. For example, Chevy has a powertrain warranty that lasts for five years or 60,000 miles. If anything goes wrong with the cars powertrain those parts that move the car down the road its covered. Gratis.

But if the door handle breaks or the window wont go up, you have to pay to fix it.

When Does An Extended Warranty Start On A Used Car

We know like many of you, that learning all there is to know about extended warranties can be a lot to digest. What is what? When do you buy? Who do you buy from? What are the differences that you need to be aware of? What are key benefits to consider? It is a lot to take in!

Well, buckle up! We will dive into the important info to consider when looking at purchasing an extended warranty solution for your used vehicle. First, lets learn what is what in the realm of warranties.

Pro: An Extended Warranty Can Provide Peace Of Mind

Many buyers argue that having an extended warranty on a used car brings them peace of mind. We wont argue. Having an extended warranty can provide a safety net for the unknown.

For example, some observers suggest simply putting the money youd spend on the extended warranty into a savings account and dipping into it as needed. They argue that if you dont need it, you can use that money toward your next car.

In reality, those savings might not cover an unexpected repair. If a transmission starts slipping after six months, the $600 in the savings account may not be enough.

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The Average Cost Of An Extended Car Warranty

So far, weve defined extended car warranties. Weve painted pictures of situations where the extended warranty was worth it, and weve identified cases where the extended car warranty is not worth it, too.;

Whats the price tag? Consumers deserve to know.

Before getting to the price, we should let you in on a little-known secret about extended car warranties. The dealership itself is probably profiting off the deal. As they say, theres no such thing as a free lunch. Everything comes with a cost. The car dealership is marking up the extended warranty for more money.

If youre getting this vibe, then you should be able to negotiate a little. If thats seemingly out of the question, then perhaps researching third party extended car warranty providers is in order. Even if you pass on the deal at the auto lot, you may be able to pick up an extended warranty down the line.

The adage is true: you get what you pay for. When it comes to extended car warranties, this is factual as well. You have to really read the policys fine print to know if youre getting your moneys worth. And the worst part is that if youre not using the service, youre basically losing money.

You are essentially betting that the car will have problems when you buy an extended warranty. The real question is, at what cost?

How Do You Tell A Reputable Extended Car Warranty From A Scam

Are Extended Car Warranties Worth It? (2021)

If you think the peace of mind of an extended car warranty could be worthwhile for you, we highly recommend buying one from a company you already do business with and have reason to trust.

Many car dealerships offer extended warranties. The dealership where you initially bought your car has every reason to treat you fairly to keep your business. Many banks and financial service companies have relationships with warranty providers. Again, your bank benefits less from selling you a sketchy warranty and losing your trust than from selling you a solid one.

If youre looking for a warranty from a reputable company, CARCHEX is one such company with an A+ Better Business Bureau rating.

Whether you choose a warranty from a bank, dealership, or reputable company, we recommend that you select one from a business you know and trust. A company with a reputation to defend, a Better Business Bureau rating, and perhaps even faces in your local community is far more likely to approve warranty repairs than a company you know only from a website.

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Benefits Of An Independent Mercedes Extended Warranty

An extended warranty can be purchased from a manufacturer or from a third-party warranty company. While there are pros and cons of extended car warranties through either option, there are a few significant benefits that come with purchasing a contract from a reputable independent provider, including:

  • Top providers offer plans with term limits up to 15 years or 250,000 miles, depending on which company you opt for.
  • There are more plan options to choose from, so you can pick the coverage that best suits your needs and budget.
  • Most independent warranty contracts are cheaper than manufacturer-backed plans because they are not subject to dealer markups.
  • Third-party warranty providers work with licensed repair facilities and dealerships nationwide, providing more options for covered repair work.
  • Reputable warranty companies offer coverage for old, high-mileage vehicles and allow drivers to purchase a contract at any time rather than before the new vehicle limited warranty expires.

Its always a good idea to compare quotes between multiple providers. You can click below to receive free, personalized quotes from a few of our top picks: Endurance, CARCHEX, and CarShield. Compare these providers directly in our CARCHEX vs CarShield, CarShield vs Endurance, and Endurance vs CARCHEX reviews.

Key Things To Know About Extended Car Warranties

  • The average cost of an extended car warranty is $1,500, but the price can be as high as $3,000.
  • Extended car warranties are only worth it if your car is unreliable and are unable to pay for mechanical repairs.
  • You cannot use an extended car warranty until the original manufacturers warranty expires.
  • Extended car warranties do not cover regular maintenance or damage caused by normal wear and tear or by a lack of maintenance.

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Should You Buy An Extended Warranty

From my research, it doesnt seem like extended warranties are worth it.

Need proof? Of those who purchased an extended warranty, 55% never even used it, according to that Consumer Reports survey. And for those who did, the savings only amounted to $837 an overall loss of $375, considering the median purchase price of $1,214.

Oh, and Consumer Reports also notes satisfaction with automobile extended warranties is among the lower rated of all products and services it ever surveys with only about a quarter of respondents saying theyd definitely get it again.

So what should you do instead? Put the money you wouldve spent on an extended warranty into a savings account, suggests Consumer Reports.

That way, youll have an emergency fund if a post-warranty problem arises. And if your car doesnt need pricey repairs, youll already have the money for a down payment on your next car.

Or, if you want to be a true Penny Hoarder, buy a used car instead.

Your Turn: Have you ever purchased an extended warranty? Was it worth it?

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Car Warranties Dont Cover Normal Wear And Tear

Are extended car warranties worth it? | Consumer Reports

Some parts of your car are expected to wear out regularly. Car warranties only pay to replace these parts if they wear out ahead of schedule. For example, depending on the model of the car, its normal to replace brake pads every 25,000 to 70,000 miles. A car warranty will generally not cover that cost.

Since wear and tear isnt covered by your warranty, the cost will be completely on you to pay. To avoid paying more than necessary, try our Auto Repair Estimate tool to help you determine the price range for your repairs.

If, however, your car was to need brake pads after just 10,000 miles, the warranty would likely cover the cost of the new pads, and the cost of figuring out what part of the brake system is malfunctioning to wear them out so fast and fixing that as well.

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Does It Work For New And Used Cars

Buying a new or a used car can help you determine if you should purchase an extended warranty. If you are buying a new car, your car should still be under the manufacturer warranty which is usually included when determining the price of the car. The manufacturers warranty will cover most repairs during your first few years of vehicle ownership.

Used cars represent different terms, however. Often, it may not still be under the manufacturers warranty. In order to check, look for the Buyers Guide on the car window to know if the cars original warranty is still intact. Some warranties will require you to pay a fee to have it transferred over to you.

If the vehicle you are purchasing is no longer under warranty and you want additional coverage on your car, buying an extended warranty may be right for you.

The manufacturers warranty:

The length of a manufacturers warranty varies depending on the maker of your car. Typically, two types of warranties are offered: bumper-to-bumper and Powertrain warranties.;

Bumper-to-bumper warranties cover your car up to 3 years or 36,000 miles, whichever comes first. Powertrain warranties last up to 60 months or until your vehicle hits 60,000 miles. Powertrain warranties cover what gives your automobile power. This typically will cover engine and transmission issues, or the fixes that are very expensive.

Peace Of Mind Or Safe Bet

There are many reasons shoppers opt for an extended warranty and some have little to do with any perceived likelihood that theyll need to make a claim. If you like to play it safe, have extra peace of mind, or enjoy being protected and backed up, an extended warranty may be a good idea even if youre fairly sure youll never need to use it.

Extended warranties are all about peace of mind, and some shoppers are willing to pay for it. Is a newer used vehicle likely to need $1,200 in warranty-covered repairs in the next 18 months? Everyones tolerance for risk and cost is different assess yours after reading all relevant documentation and go with your gut.

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Warranty Exclusions You Should Know

Even if you purchase a bumper-to-bumper warranty, no extended warranty plan covers every single item in your vehicle. There are several exclusions to be aware of before you make a purchase. Your warranty will most likely exclude:

  • Damage caused by wear and tear
  • Accidents or recklessness
  • Repairs due to lack of maintenance
  • Tires, wiper blades, brake pads, and car battery
  • Cosmetic repairs and independent modifications

When you shop for an extended auto warranty, you may come across companies that require a vehicle inspection in order to purchase a plan. CARCHEX does not require a vehicle inspection, which makes plans more accessible to drivers who need them.

So Should I Get A Used Car Warranty Or Not

Are Extended Car Warranties Worth It?

We cant predict the future, but this same basic principle applies to every warranty purchase decision: Do research on your particular car before investigating extended warranty options. If your car has a track record of expensive repairs, an extended warranty can make sense. Get the cars vehicle identification number and get a Carfax Vehicle History Report to see if any of the problems have been fixed.

Even if you buy a historically reliable vehicle, there is always a chance that the unusual can happen. If having a warranty helps alleviate that stress, then by all means shop around for a good warranty plan.

Doesnt My Car Insurance Cover Mechanical Breakdowns

No. Regular car insurance does not cover breakdowns, maintenance or wear and tear. You would need to buy an extended warranty or an MBI policy to cover repairs. Once you have a warranty or MBI policy in place, it does not replace your car insurance. These items are an add on to your already existing basic car insurance. Basic car insurance covers state insurance requirements as well as offering additional coverages like comprehensive, collision and underinsured motorists coverage to make sure you are insured if and when in an accident.

How Much Is An Extended Warranty On A Used Car

Are you considering an extended warranty solution for your used vehicle? There are a lot of questions that come when researching extended warranties, we are aware of that. We hope to help in your research when figuring out whether an extended warranty is your best option. There are factors that you will want to consider, deductibles and plans to explore. Many people find extra comfort in an extended warranty. You might too, first, lets look at the options and next, we can take a look at the factors to securing a good value when it comes to covering your used car.

What Is Covered Under A Carchex Extended Warranty

Unlike your manufacturers warranty, an extended warranty can provide comprehensive coverage for a longer period of time. At CARCHEX, we provide five levels of coverage with different protection plans in each level, ranging from basic powertrain protection to bumper-to-bumper coverage.

With some contracts, you may even receive wear and tear coverage, tire and road hazard coverage, and seal and gasket coverage.

All plans come with 24/7 roadside assistance benefits that provide reimbursement for rental cars, towing, and even meals and accommodations needed after breakdowns that happen over 100 miles from home.

Take a look at the chart below to compare our various Extended Vehicle Protection Plans.

Factors To Consider When Comparing Prices

Are Extended Car Warranties Worth It?

Most plans and policies factor in a couple key items. These items tend to be standard across the board when it comes to pricing. Pricing is determined by your make and model, the mileage on your vehicle and the year your model was built.

In addition to the above, there are usually several benefits that require some additional consideration.

  • Fully review the terms and conditions, you may find that an MBI or extended warranty will cover more parts and systems than even a dealer warranty.
  • Most aftermarket plans will cost less than an extended
  • warranty at the dealership.
  • Do you choose where the repair is made?
  • Most extended warranties and MBI policies can be transferred to a new owner, if and when you sell your vehicle.
  • Many offer multiple plans to fit into any budget.
  • Make sure to review the deductible offers. These are usually $100 $500.
  • Check the mileage restrictions. Some warranty companies can insure and cover higher mileage vehicles.
  • Review age restrictions.
  • Is there a waiting period or are you covered when you buy?

Additional items to know

  • Not all vehicles can be covered. Most often there is a mileage restriction and/or the age of the vehicle can determine coverage.
  • MBI and extended warranties are not Roadside Assistance.
  • MBI and extended warranties do not cover wear and tear and routine maintenance.
  • Whether you buy MBI, you will still need basic car insurance. Coverage is required. The minimum requirements will vary from state to state.

Should You Buy An Extended Car Warranty On A New Or Used Car

When you buy a new car, you probably wont need to use an extended warranty right away because the manufacturer warranty which is typically included in the price of the car covers the cost of most repairs for the first few years you own the car.

But if you buy a used car from the dealer, it may not be covered under the manufacturers warranty. To find out, look for the Buyers Guide on the car window. It should let you know whether the car is being sold with a warranty. If it is, you may need to pay a fee to have it transferred to you.

If youre buying a car thats no longer covered by the manufacturer warranty or you want additional coverage after it expires, you may buy an extended warranty for an extra fee.

How Long Does The Extended Car Warranty Last

The length of the extended warranty is completely up to you, the buyer. The extended warranty will kick in after your manufacturers warranty expires.

If you only plan to have the car for about three years, then it would be essentially a waste of money to opt for the extended warranty since you wont even have the vehicle anymore. However, if you plan to keep your car for years to come, an extended warranty might be a good investment.

Just like with most plans, the length of the warranty is entirely up to you. Whether you go through a trusted third-party vendor like CARCHEX or;the manufacturer, you can customize the length of the warranty based on your specific needs. Some companies even offer short-term contracts on a month-to-month basis.

What Is An Extended Car Warranty The Definition

In order to know if an extended car warranty is worth it, its important to discuss what exactly one is in the first place.

Lets imagine the scenario. Youre at the car lot, looking at the deals and steals out there. There are some models that look promising, but theyre used. The salesperson says, Hey, how about an extended warranty? Does that sweeten the deal?

It might! It may not. Its hard to say.

For example, if youre buying a vehicle thats five years old, problems will soon be on the horizon. Youre buying a vehicle almost at its middle age. Most vehicles only make it twelve years out there on the open roads. After that, its RIP. Theyre off to the junkyard.

The extended warranty attempts to put some time in between that happy and joyous purchase moment and the moment the cars time comes. The extended car warranty is legally a vehicle service contract. Its like a plan you can choose should a special list of repairs occur. A lot isnt covered, by the way.

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