Should You Buy an Extended Car Warranty?

The answer to the question of whether or not you should buy an extended car warranty depends on your vehicle’s current reliability and your own financial circumstances. The cost of a warranty can add up quickly, so it’s important to consider the pros and cons of each option before making your decision.

The main benefit of an extended warranty is that it can help you avoid large repair bills and potential financial ruin. The other benefits of extended warranties vary and can include the ability to spread out maintenance costs over time and the possibility of increasing a vehicle’s resale value.

Purchasing an extended warranty can cost thousands of dollars, so it’s essential to weigh the pros and cons carefully before making your decision. You should also take into account the type of coverage you are looking for, as some plans offer more comprehensive protection than others. The specifics of the plan you choose will depend on your vehicle’s make, model and year. You may want to consider bumper-to-bumper coverage or a basic powertrain warranty that covers the engine, transmission and drivetrain components. Additionally, many extended warranties come with perks like roadside assistance, rental car reimbursement and trip interruption coverage, which can be very helpful if you are traveling a long distance for work or pleasure.

Some F&I managers can pressure you to buy a warranty, but car dependability is on the rise, according to the latest JD Power study. Plus, you can always save money for the unexpected by setting aside a portion of what you’d spend on an extended warranty.

Before you buy a car warranty, request quotes from multiple companies. Ask providers about their coverage options, service deductibles and waiting periods. Look for a policy that offers the most flexibility and best value for your budget. Some companies offer a simple online quote tool, while others require more detailed information, including your vehicle’s year, make, model and mileage.

Once you have a few options in mind, check the contract details for any hidden fees or conditions. For example, you may find that the company only pays for repairs at certain facilities or that it depreciates the value of your vehicle based on your annual mileage. You should also consider what happens if the entity that is supposed to pay your bills goes out of business, as this could leave you with no coverage.

The deductible that is charged for warranty service can also have an impact on the cost of the plan. Some deductibles are per service visit, while others are a flat fee that applies no matter how many visits the car requires to get fixed. Additionally, some extended warranties have a “disappearing deductible,” which eliminates the need to pay a deductible for covered repairs.

You can purchase a car warranty at most dealerships, auto clubs and through insurance companies. Be wary of warranty offers by unsolicited robocallers, as these are often scams. You can also ask the dealer if they sell warranties or roll the cost into your car payments.buy extended car warranty