Tuesday, March 19, 2024

Should I Get Extended Warranty On Car

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The Wear And Tear Argument

Why Not to Buy an Extended Car Warranty (Scam)

Wear and tear have got to be in my top three list of excuses salespeople give me when attempting to sell me an extended warranty. The fact is, wear and tear are often NOT covered, and if it is, its covered under the manufacturers first year of coverage. For things like belts and brushes, youre not likely to get them serviced as part of any warranty. But seriously, is your tool, appliance, or device going to really wear out in year one?

Really? I dont think so. That would be a defect . Want to have some fun? Ask the salesperson to tell you what parts are more than likely to wear out? Our guess is they will stare at you with a blank face, or make something up on the spot. They arent trained for thismost simply dont know. What they ARE trained for is how to sell extended warranties and tell you how the product works and what features it has.

Is An Extended Car Warranty Worth It

An extended warranty, also known as a vehicle service contract, is a contract between you and a provider designed to protect your car from costly repairs. Generally, you make small, monthly payments toward your contract and pay a deductible if and when you need covered services from a mechanic.

Buying an extended warranty is a gamble investing in an extended warranty gives you peace of mind and provides coverage in case of a mechanical breakdown, but you may not end up needing it. So if you think you can save your money, know that you risk paying a lot more out of pocket if your car breaks down.

Are You Willing To Follow The Manufacturer’s Maintenance Requirements

Keep in mind that you could accidentally void your warranty if you don’t stick to the warranty’s maintenance schedule. You could pay for a warranty only to learn that you’re no longer eligible for services because you missed an oil change or tuneup, neither of which is covered by the warranty. The same applies if you have a trustworthy mechanic you’d like to use who doesn’t work at the local dealership or an authorized repair shop.

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Your Warranty Can Pay For Itself After One Major Repair

Lets face it car repairs are expensive. The computer systems in modern cars can easily cost over $1,000 to fix! By buying an extended auto warranty upfront, these unexpected costs do not have to be paid out of pocket. The cost of one major repair may be more than you paid for your entire warranty, meaning youre saving some serious cash in the long run.

Con: Extended Warranties Are Expensive

Should I Buy Extended Warranty On A Used Vehicle : Should I Get An ...

When you buy an extended warranty, you are placing a bet. Your bet is that your car will ultimately require more repairs than the cost of the warranty. The warranty provider is also placing a bet. The warranty provider’s bet is that your car will not require more repairs than the cost of the warranty. One of you will win the bet, and considering the number of extended warranty providers there are, it would appear that the odds are not in your favor. Keep in mind, however, that most times the price of an extended warranty can be negotiated.

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Is It Worth Taking Out An Extended Car Warranty See Our Full Guide And Prices

In an ideal world, every used car listed for sale would be immaculately maintained, perfectly clean and fit to drive for many years to come. Unfortunately, however, we’ve all heard the stories of used car purchases gone wrong and theres no guarantee of how long used cars will continue driving for. An extended car warranty is a protection plan designed to keep used cars operating at their best.

If you’ve already bought a used car, there are warranty options to ensure your vehicle investment doesn’t turn sour. Extended warranties are available The best extended warranty packages will cover any problems with your car’s mechanicals and electronics, as well as additional features like air-conditioning and airbags. Comprehensive packages also cover the cost of labour, which can help you save hundreds of pounds in the case of a problem.

All new cars include a warranty, so if you’re buying a used car that’s only two or three years old, there may still be several years of that initial warranty left on the car. Most manufacturers provide cover for three years, while some offer a five-year or even a seven-year period of protection. It’s worth checking whether the car has any remaining cover before you start looking into an extended car warranty.

Cons Of An Extended Warranty

Before you decide if the cost is worth it, there are some disadvantages to consider, as well.

  • Usage Many people who purchase an extended car warranty never use it. And if they do, the cost of the repair is often less than the cost of the warranty.
  • Overlap If the coverage period of the extended warranty overlaps with the manufacturers warranty, you may pay for a warranty youre already getting at no cost. And with a new car, the extended warranty likely wont be in effect until the manufacturers warranty expires.
  • Coverage Extended warranties typically dont cover everything that might go wrong with your car. Read the fine print to find out what it does and doesnt cover, so youre not surprised by a repair bill you thought would be paid for under the warranty.
  • Service requirements You may only be allowed to have your car fixed at certain repair facilities.
  • Depreciation clauses Some extended warranties may only pay for a portion of the cost to repair or replace parts that need to be fixed, based on the cars mileage.
  • Reliability Under most extended warranties, either the dealer, manufacturer or an independent third party is responsible for paying for repairs. If the entity thats supposed to pay the bills goes out of business, you may be stuck with a warranty you cant use.

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Is Your Vehicle Unreliable

An extended warranty is worth your time if your car isn’t extremely reliable and you wouldn’t necessarily be able to pay for major repairs right now. If you purchase a used car from a dealer, an extended warranty could be the right choice if you’re uncertain about a vehicle’s reliability. Additionally, a warranty could be worth the cost if you know that your car is prone to specific types of problems, like transmission issues.

Think About The Vehicle Problems You Might Expect

The Truth About New Car Warranties Dealers Don’t Want You to Know

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.

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Buying Extended Warranties Protect Against High Repair Costs

Poppycock. We dont believe the notion that buying an extended warranty protects you from high repair costs. This turns out to be pure fiction most of the time.

When dealing with an item such as a power tool, the extended warranty you buy can actually create a hassle by having the tool sent a repair shop that isnt convenient and offers the lowest price for the most work. If you can actually shop around your local area, you may find that repairing that lawnmower or refrigerator costs less than the price of the extended warranty. That especially holds true when factoring in that not all of your products are going to break.

When Should You Consider An Extended Car Warranty

Certain vehicles are well known to have major repair needs. We pick on Land Rover sometimes, but lets choose among some of the more common everyday cars we all drive. Subaru has a reputation for large issues with the engines in the ten-year old generation. They can have head gasket issues that lead to overheating. Nissan was a pioneer in CVT transmissions and the earlier vehicles have a reputation for trouble with that component. There are even a few years of the bullet-proof Prius that struggled with headlight issues. If the vehicle you drive has a known track record of trouble, an extended warranty may make sense.

Some of us live on a budget that runs week to week or month to month. If you cant afford a surprise breakdown with a four-figure repair bill, an extended warranty might be right for you. Just keep in mind that according to Consumer Reports studies, most people pay out for a warranty more than they recoup in covered repair bills.

Others among us just hate surprises. If you own a highly reliable but older vehicle, a warranty may still be worth the cost. Lets say you have a 2010 Lexus IS 350C with a retractable hardtop roof. If that roof runs into any trouble your extended warranty is going to pay for itself in one repair. Wouldnt it be a nice feeling to have a fixed cost of ownership and keep driving the car you love?

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Should You Get An Extended Warranty For Your Car

Some car buyers want extra protection, but these plans arent for everyone

Car buyers crave reliability: 95 percent of new- and used-car shoppers rank it high when choosing a car, according to a national survey conducted by Consumer Reports. But for many shoppers, even knowing which cars are trustworthy isnt enough. They want protection.

Vehicle service contracts, often referred to as extended warranties, are a tempting option for consumers who buy a used car or for those who want to extend the bumper-to-bumper coverage on a new car. These are typically included with certified pre-owned cars sold by dealerships, along with an extensive inspection.

No matter the exact type, extended warranties are an investment in peace of mind that limits financial risk for a set period of time. But beware: A CR member survey conducted in 2013 showed that car owners typically paid more for the coverage than they got back in direct benefits. This isnt surprising, because extended warranties make a lot of money for those who sell them.

The fact is, extended warranties are overpriced. Thats the reason people sell them, because they make a bundle on them in commissions, says a money expert and radio talk show host, Dave Ramsey. I dont recommend buying extended warranties, ever. If you cant afford to repair your car, then you cant afford the car.

When Does The Warranty Start

Audi extended warranty

You should find out when the warranty would actually start. Is it at the end of the factory limited warranty or at the end of the powertrain warranty? Again, it may depend on the warranty and what exactly it covers.

How much should I pay for an extended warranty?

Edmunds.com does not have pricing information on extended warranties. They are usually negotiable and you can sometimes find online forum discussions where people will post how much they paid for a specific warranty.

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What Repairs Are Covered And Not Covered

Even a bumper-to-bumper factory warranty does not cover everything. The warranty will not cover “wear” items such as tires, windshield wipers and brake pads. Also, if the vehicle has been driven in a way not intended by the manufacturer, the warranty might not be honored. You should always research the company and read any available literature to learn what is and isnt covered.

Im Happy To Pay For A Little Peace Of Mind

The best reason, by far, to purchase an extended warranty is peace of mind. If skipping the extended warranty will make you lose sleep or cause you anxiety every time you get behind the wheel, go ahead and buy one. Peace of mind is priceless.

If you do take the extended-warranty road, there are a few key pieces of information youll need. First, whats covered under the warranty? If you do want to take the extended warranty road, there a few key pieces of information youll want. First, whats covered under the warranty? Chances are it wont cover most items that tend to wear out quickly, things like brake pads and calipers, belts, wheel cylinders, fuel pumps and water pumps. But you should at least be aware of what the warranty does and does not cover, and if the does not list is too long, the warranty may not be worth it.

You also should find out who will cover the initial cost for covered repairs. Some extended warranties will pay the mechanic directly, while others will reimburse the consumer after he or she has already paid for the service. And youll want to know who stands behind the warranty. Getting an extended warranty backed by the manufacturer allows you to get repairs at any dealership, but an extended warranty backed by the dealership where you bought it may cover only repairs done at that dealership.

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Hybrid Component Warranty And Ev Component Warranty

Hybrid component warranties and electric vehicle component warranties cover repairs to the battery, electric motor, and other unique components found in an electric or hybrid car. Electric motors require much less maintenance and are subject to less wear and tear than gasoline engines. But the battery of an electric or hybrid car can carry much of the cars value, and replacing it is among the costliest repairs in the automotive world. So, these parts get covered separately.

Our hypothetical C-HR has no components specific to a hybrid or electric car. But, for comparison, a 2022 Toyota Prius Prime plug-in hybrid vehicle on the same lot carries an 8-year/100,000-mile warranty on its hybrid components and a separate 10-year/150,000-mile warranty on its battery.

The Pitfalls Of Extended Warranties

Should I buy extended warranty for my vehicle?

Whilst it might be reassuring to have an extended warranty, they can come at a high price. And it still wont necessarily cover everything that could go wrong.

And, of course, you could find that the cost of the repair required was less than the price of the warranty. Or you may never need to use the warranty.

Interestingly, according to a Consumer Reports survey, 55% of respondents who bought an extended warranty didnt use it. Plus, only a quarter of survey participants said theyd buy one again.1

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Dealer Extended Warranties Vs Third

There are plenty of good reasons to purchase a car from a dealership, but your extended auto warranty doesnt have to come from a car dealer. In fact, dealership vehicle service contracts often come with both restrictions and added costs. Limitations may include:

You dont always have to buy an extended vehicle warranty from your dealer at the time you purchase your car. Some dealership representatives might claim you can only get a certain interest rate or financing approval if you buy your extended warranty at that time. This is not true.

Your search for the right extended protection should also take into account reputable third-party warranty companies. Unlike a dealership-branded service contract, a third-party warranty can offer flexibility in coverage and benefits like your choice of repair facility. Here are some of the top perks:

Is It Necessary To Get An Extended Warranty On A New Car

If you lease or keep your car for less than the factory warrantys coverage, you do not need an extended warranty. If you intend to keep your car until the wheels fall off, you might want to consider purchasing an extended warranty to cover repairs that are subject to the cars fifth or sixth year.

After the manufacturers warranty on a car expires, the vehicles extended warranty will cover specified repairs. Some extended warranties are more extensive than others. Avoid policies with deductibles that have extended benefits. It is common for different levels of warranty to be offered with each bump in price. A typical new car warranty will last three years or more, implying a 36,000-mile lifetime. The manufacturers warranty will be voided after its expiration date. An extended warranty typically costs between $3,000 and $5,000. Some businesses offer short-term contracts every month. A large number of dealerships attempt to increase the price of your warranty in order to make money.

Purchasing an extended warranty can provide you with significant protection for your investment. You can save money by purchasing an extended warranty at the right time. If you buy an extended warranty near the end of the original coverage term, you may be able to get a lower premium rate.

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Extended Car Warranty Cost

The average cost of an extended car warranty is $1,500. The exact price can vary widely between policies, however, usually falling between $1,000 and $3,000.

There are several factors that affect how much an extended car warranty is going to cost. For example, certain makes and models of cars cost more to cover, as do older, high-mileage cars that are more likely to break down.

The cost of an extended warranty also depends on how much coverage a driver is purchasing. If you purchase a powertrain warranty, youll likely pay less for coverage than you would for comprehensive bumper-to-bumper coverage.

Learn more about what is the average cost of an extended car warranty.

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