Sunday, November 27, 2022

Should I Buy Extended Warranty On Car

Don't Miss

An Extended Car Warranty May Help Cover The Cost Of Certain Repairs To Your Vehicle When The Manufacturers Warranty Expires But Theyre Not For Everyone

Should you buy an Extended Warranty for your Toyota?

While it may sound like a good idea in theory, extended warranties often come with a high price tag and dont necessarily cover everything that could go wrong.

Plus, many people who buy extended warranties never use them. In that case, an extended warranty becomes a cost with no financial return. According to a Consumer Reports survey, 55% of respondents who bought an extended warranty didnt use it and only a quarter of survey participants said theyd buy one again.

And the cost for repairs among respondents who used their warranty was typically less than the cost of the warranty.

Instead of purchasing an extended warranty, it may make more sense to set aside the money youd spend on it and use the funds instead for needed repairs.

But before you decide whether an extended warranty is right for you, there are some things you should know like how an extended car warranty works, how much it costs, and the pros and cons of getting one. And while well refer to this as an extended warranty as its a commonly used term, this is not a warranty as defined by federal law and doesnt come with the consumer protections that other warranties do.

Deductible And Reimbursement Method

You’ll also want to see what the deductible of the policy is and the company’s reimbursement method. Low-dollar or zero-dollar deductibles are more expensive than higher deductibles.

As far as reimbursement, you may find that the company pays the repair shop directly. However, some companies will only reimburse you for the cost of repairs after they receive the invoice or receipt. In rare cases, some extended warranty customers have stated that it takes a long time for reimbursement , putting them in a financial bind and causing them to chase payments.

Where To Buy An Extended Car Warranty

There are a lot of options when it comes to buying a used car warranty in Colorado Springs. We know that it’s challenging to find the dealership that cares about you. At Phil Long Dealerships, you will find that our entire staff puts your needs first. Just look through our rave reviews from customers just like you. When it comes to finding you a quality vehicle, we make it our life mission. Once you find the car of your dreams, we have the extended warranty options that cover you. Let us do the hard work for you – trust us for all of your used car needs.

Read Also: How To Get Car Dealer License

Find Out If You Can Add An Extended Auto Warranty After You Buy

Your car comes with a factory warranty at the time of purchase. After this protection expires, you may be looking into an extended warranty to avoid paying for repairs out of pocket, but when exactly should you purchase vehicle protection? Can you add an extended warranty after buying the car?

An extended warranty, also called a vehicle service contract, foots the bill for specific repairs and is purchased separately from your vehicle. We know extended warranties can be confusing without the right information, so well discuss when and where you should buy an extended warranty and if a contract is worth the financial investment.

Weve researched and ranked the best extended auto warranty providers on the market, considering factors like coverage, affordability, and customer service. We recommend reaching out to a few of our top-rated providers for free quotes to kick off your research.

Getting An Online Quote

What Extended Car Warranty Should I Buy

Most online quotes are not actual online quotes, but rather a lead generation form that may put you on a list to get robocalled. Which is not fun for anyone. If they do not provide pricing and the option to check out online, then you may have to have a conversation with a salesperson to get the details you need to make a decision. Weve found that most major companies handle people professionally, so calling them can be a good way to go. If they are not transparent or professional, then hang up and move on to your other options.

At olive.com, we provide an online quoting tool with 9 different options for the vast majority of automobiles sold in the US today, as long as they have under 140,000 when they start with us and they are less than 10 years old, and we cover them up to 185,000 miles. In most cases, we can give you a quote for a car you own or are considering in less than 2 minutes. This is one of the features that make our MBIs and VSCs one of the best extended car warranty solutions. You know what your options and can actually purchase with no phone calls at all. and NO ROBOCALLS!

For now, if your car is older, has over 140,000 miles or is one of the few brands or models we do not cover you will need to reach out to a different company. Make sure you are prepared with the questions below.

Also Check: What Soap Can I Use To Wash My Car

How Much Should I Pay What Kinds Of Fee Structures Are Available

Finding real pricing, and an honest cost analysis, can be a challenge. Typically, your car dealer will give you a few options when you buy your vehicle, but you may not be sure if they are offering you the best deal. Shopping online can be daunting because there are so many choices, and its hard to know whats right for your needs. Even offline, were bombarded with radio and television ads.

Lets cut through the noise and lay out your extended car warranty shopping and buying options.

Do You Need Extended Warranty Coverage

If you cant afford costly repairs to your vehicle, purchasing an extended warranty can be a smart decision. Some common repair costs can total $1,000 or more, which can put a big dent in your budget. With an extended warranty, you can generally make monthly payments and only pay a deductible for service.

The table below shows the cost of some expensive Toyota RAV4 repairs according to RepairPal.

Toyota RAV4 Repairs
$1367- $2,123

Don’t Miss: What You Need To Rent A Car

Should I Buy An Extended Warranty For My Car

Whether you decide to buy an extended warranty or not really boils down to who you are and what you want. If you are a person who enjoys the peace of mind that comes with planning for the unexpected, then an extended warranty can help you do just that, provided that you choose a legitimate warranty that serves your needs. Be sure to read the fine print, don’t just browse the FAQs. Like anything in life, the devil really is in the details, and you dont want to get stuck paying for an extended warranty that doesnt give you the perks you thought you were signing on for.

Where To Buy An Extended Warranty For A Used Car

Should You Buy Extended Warranty on Cars?

In addition to the dealership where you purchase your used car, there are several companies that offer MBI or extended warranties. Remember, not all warranty companies are the same. Do your research prior to buying. Again, take a look at those terms and conditions so you know the ins and outs of each plan.

Also Check: Do You Need Car Insurance In New Hampshire

Think About The Vehicle Problems You Might Expect

Consider how reliable the make and model of the vehicle is, whether its known to have specific problems and whether the car has a lot of high-tech components that might fail.

Each vehicle model and make has parts and systems that tend to fail more often than on a competitor’s model some cars may be known to have transmission issues, while others might have climate control units that are prone to fail.

Even if understanding a vehicle’s potential issues doesn’t dissuade you from making a purchase, you can avoid expensive repair bills with an extended warranty that covers known potential problems.

Is A Used Car Extended Warranty Worth It

Whether or not you should get an extended warranty on a used car depends on your needs and your budget. Some drivers may prefer to pay for car repairs as they arise, while others may not be able to afford unexpected expenses out of pocket. In that case, an extended warranty on a used car is worth it because you can make small monthly payments over time.

If your car doesn’t experience any major issues, you may spend more money on the extended warranty than on auto repairs. However, an extended warranty on a used car can bring considerable peace of mind to an owner.

Below we discuss several reasons an extended warranty may or may not be worth it for you.

Also Check: What’s The Cheapest Electric Car

What The Extended Warranty Covers

Although extended warranty companies throw out phrases such as “comprehensive coverage” or “full coverage,” this isn’t always the case. Most often, covered repairs are limited to the fine print within the contract.

While this may cover mechanical breakdown and other big-ticket items, it won’t cover routine maintenance such as tire rotations or oil changes. To save yourself from surprises down the road, make sure to read every sentence of the fine print to see what your warranty covers.

What Is A Good Price For An Extended Warranty

Should You Buy an Extended Warranty for Your Car?

Based on our research, a good price for an extended warranty is anywhere from about $1,700 to $3,000. This is a wide range because the cost of a warranty will depend on many factors, including what plan you buy and your vehicles age and model.

Theres no one-size-fits-all pricing for extended warranty coverage, but heres a closer look at the individual factors that will affect your warranty cost:

  • Warranty length: Longer term limits will lead to higher overall costs.
  • Location: If you live in a high-traffic area, you may pay more for coverage.
  • Deductible: In general, the higher your deductible, the lower your premium cost will be, and vice versa.
  • Warranty plan: As mentioned, bumper-to-bumper warranties will be more expensive because theyre more comprehensive.
  • Vehicle age: Old, high-mileage vehicles are more prone to mechanical breakdowns, so theyre often more expensive to cover.
  • Vehicle type: Expensive cars need expensive repairs, and thats reflected in warranty costs. If you own a sports car or luxury car, youll likely pay more for coverage.

Recommended Reading: When To Turn Car Seat Forward Facing

Do You Really Need It

Buying an extended warranty is largely dependant on the ownership plan of each individual. If you plan to use the car within its standard warranty range and then sell it off, you could forgo the extended warranty but it can help with negotiations and result in a better resale value. However, if you are planning to keep the car for a period that’ll outrun the standard warranty, then it clearly works out to be quite beneficial. Yes, cars today are more reliable than ever, but, as with anything mechanical, there can be failures, especially after two or three years. This is where the extended warranty really helps.

Shop Around Read Reviews Do Your Homework

As with all products, whether or not you should purchase a warranty is entirely dependent on your own personal needs and on the quality of the product you choose. The best warranties offer peace of mind, protect you against unexpected repair bills and can also come with reassuring added benefits. Another plus for many motorists is that whether you pay a lump sum or a monthly amount, your costs are regular, predictable and therefore easy to factor into your budgeting.

At Car.co.uk, our advice is that you undertake some detailed research, read plenty of customer reviews and ensure that you check the small print regarding excluded parts, caps on labour cost, and more complex industry terms like betterment and consequential damage. After doing this, youll be able to make an informed decision.

Recommended Reading: When Was My Car Manufactured

Pros Of An Extended Warranty

The biggest benefit of an extended warranty is that it can save you money if your car needs a costly repair thats covered under your contract. Instead of paying the entire bill out of pocket, youd only be responsible for covering the deductible and then the warranty provider would pay for the rest, so long as the issue is included in the service contract.

Having an extended warranty can also help provide peace of mind if worrying about how youll pay for a repair is something that will keep you up at night.

similar to your car insurance, Roberts says. We dont like to pay for it, but we certainly appreciate it when we need it.

How Long Does The Extended Car Warranty Last

Why Not to Buy an Extended Car Warranty (Scam)

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.

Also Check: How Much Is Car Insurance In Nc

Advantages Of Extended Warranties

We recommend an extended warranty on a used car to cover unexpected repairs. These warranties provide several benefits, including:

  • Not paying for expensive repairs out of pocket Most extended warranties cover repair bills, towing costs, roadside help, and even rental car reimbursement.
  • Peace of mind on the road An extended warranty lets you anticipate the warranty cost minus the deductible is all thats required to keep the car on the road.
  • Keep the vehicle for years knowing its protected Extended warranties help you keep your priced used car for years by covering repair costs.

Types Of Extended Warranties

When you buy an extended warranty, youre buying it either from the manufacturer or a third party. For instance, an extended warranty bought from Honda or Mazda will be from the manufacturer directly and can only be purchased at specific dealerships.

Otherwise, you can purchase an extended warranty from a third-party company that is not affiliated with the manufacturer or dealership. These can be applied to both new and used vehicle purchases. When dealing with third parties, however, its important to be diligent about who you deal with to ensure the company is legitimate and trustworthy before signing a contract with them.

Does your friend drive your car on occasion? Find out if your friend is covered under your insurance.

Recommended Reading: Car Ac Makes Noise When Turned On

Should I Buy An Extended Warranty

Youve spent hours, days, or maybe weeks researching, shopping, and negotiating for your next vehicle. Finally, youve picked out the right car, worked out a reasonable price, and pulled the trigger on a deal. It feels like all the big decisions have already been made as the salesperson shows you to the Finance and Insurance office and then the F& I manager drops another choice at your feet: Do you want to buy an extended warranty?

This question can be daunting if you havent planned for it, especially if youre worn down from the car-buying process. But doing some research beforehand will be a major help, just like it was when you were deciding which vehicle was right for you.

When You Don’t Need An Extended Warranty

Should I Buy Extended Warranty On Car

If your vehicle still has a lengthy manufacturer’s warranty on it, you might want to hold off on getting an extended used car warranty in Colorado Springs. Examine the coverage of the manufacturer warranty as you might have enough protection to provide the security you need.

The cost of an extended car warranty is another reason. If an extended warranty will impose a financial burden on you or your family, explore other cost-effective options. Unfortunately, there is no standard cost for an extended used car warranty. This price is dependent on the vehicle and protection required. For the most part, an average used car warranty costs between $350 and $700 per year. Here are some of the factors that affect the price of a car warranty:

  • Age & Mileage – the older the vehicle or higher mileage it has, the higher the prices will be.
  • Type of Vehicle – used car warranties on luxury cars or sports cars might cost more. This is due to the increased price for parts.
  • Deductible Cost – the lower your deductible is, the higher the warranty cost will be. If you can afford a higher deductible, you will save more money on the coverage.

Also Check: How To Recharge A Dead Car Battery

Do I Need An Extended Car Warranty If I Have Breakdown Cover

While there is some overlap between car warranties and breakdown cover, they are not exactly the same.

The main difference is that car warranties cover the cost of parts and repairs for certain mechanical faults, while breakdown cover specifically covers the cost of emergency assistance and recovery if you break down. Breakdown cover doesnt normally cover the cost of any labour and parts needed to fix the problem, although it may be offered as an optional extra.

However, breakdown cover can also cover a greater range of problems. While car warranties will exclude problems relating to consumables like tyres and batteries, you can still make a claim on your breakdown cover if you have a flat battery or puncture that is preventing you from driving.

So, if you want peace of mind that you are covered in the event of a break down and for any necessary repairs, it may be worth looking for an extended car warranty which includes some levels of roadside assistance in its cover, or by taking out a separate breakdown cover policy in addition to a car warranty.

More articles

Popular Articles