Even if you would never consider buying an extended warranty when you purchase a new car, there are situations that you might think about. The question remains, how do you find the best extended car warranty, and is it even worth it?
It is hard to say, but an extended warranty can give you peace of mind, or it can be a burden on your wallet. When you think about purchasing a warranty, there are several things to weigh before making that decision.
When an Extended Warranty Is a Good Idea
Some people plan to keep their car for as long as they can when they make that purchase. It makes sense because it is a sizable investment, and people want to protect their assets. If that sounds like you, then you might want to think about purchasing an extended warranty. The best extended warranty will be transferable, too, so if you decide to buy a warranty but then want to sell the car while it is still covered, the warranty will go with the vehicle to the new owner.
If the car you chose is prone to issues and you know this ahead of time, you will want to purchase the extended warranty. Some vehicles rank better than others when comparing common problems and repairs, so do your research before choosing your car. If you have your heart set on a vehicle that is known for having issues, do not skip the extended warranty.
After reading the warranty, you will also be clear on what the dealer will provide for repairs. If you are happy with the coverage provided, you may want to consider the extended warranty. The best extended car warranty is going to be worth its cost compared to spending on repairs
When an Extended Warranty Is Not a Good Idea
If you have a new car, you do not need an extended warranty unless you plan to keep it until it falls apart. Most people do not hold on to vehicles for more than a few years, so you probably will not need a warranty. Extended warranties do not kick in until after the first few years, so it is a waste of money if you trade in your car before then. The same thing applies if you are leasing a vehicle and it is returned before the warranty expires, which is typical in leasing programs.
Used cars do not always need an extended warranty either. In case you didn’t know, most cars have a powertrain warranty that steps up after the initial bumper-to-bumper warranty expires. Depending on the car manufacturer, you might have a powertrain warranty on your vehicle if it has less than the company’s declared mileage limit.
Repairs can add up, but realistically, most cars will not use the extended warranty because it does not usually cover maintenance essentials, like oil changes or new tires. Even with other repairs that seem costly, like a faulty oxygen sensor at a $400 price tag, it is still less for you to pay compared to the typical warranty price tag. You can expect extended warranties to be somewhere between $1,000 and $4,000, depending on your coverage.
What to Consider in an Extended Warranty
When a dealer’s salesperson approaches you, you will have a lot of information thrown at you concerning extended warranties. Most of what you hear will be fluff, but there are a few things to notice, so you get the necessary details.
Price is always essential, so pay attention to the total price as well as the monthly payment. Remember, the total cost of the warranty can also be spread out over a few years to make it more affordable, so do not forget to ask about that. Some warranties also require a down payment. Take note of the deductible, too, because a high deductible may not be worth the coverage.
Every warranty has a mileage limit, so you will want to think about this, too. In the end, if you never use your warranty, it will not matter how much you paid for it because it will be an extra expense you did not know you would not need. You must be okay with knowing that when you purchase an extended warranty, there is a good chance you will never need it.
Also, make sure that you do not fall for an extended warranty scam. Never provide personal information to a caller claiming to want to talk with you about an extended warranty unless you can ensure that you are not being scammed. Legitimate companies will give you the time to think about an offer before you accept it, and they will not put you in a high-pressure sales situation.