Most new cars come with a manufacturer’s warranty. If that warranty is about to expire, an extended warranty might seem like a good idea.
However, not everyone should buy an extended car warranty. Consider the costs, your risk tolerance and your car’s reliability before making a decision. Also consider whether the warranty provider is reputable.
Cost
A warranty can be costly if you don’t shop around for the best price. Some warranties come with extras, such as roadside assistance or rental car coverage. These add-ons are often cheaper than the warranty itself. Another factor to consider is how long you will keep the vehicle. Some warranties have specific timeframes or mileage limits, such as a powertrain warranty that covers the engine and transmission for five years or 60,000 miles.
Some reputable consumer advocacy groups, such as Consumer Reports, recommend against purchasing extended warranties. They argue that extended warranties have many “gotchas” and rely on fine print to deny coverage for repairs.
When choosing a warranty provider, it’s important to do your research and read reviews. Some warranties are offered through traditional dealerships, while others are sold by independent third-party providers. It’s also crucial to find out if the warranty provider has a network of certified repair shops. Some providers only accept vehicles from their own network, while others allow customers to take their cars to any reputable repair shop.
Coverage
The cost of an extended warranty can vary widely, depending on the plan and deductible you choose. Some companies also offer additional benefits, such as roadside assistance, rental car coverage, and travel vouchers. You should always compare quotes to find the best deal.
The most important thing to consider when purchasing an extended warranty is the level of protection you’re getting for your money. You can also save money by setting aside a rainy day fund to cover unexpected repairs.
It’s a good idea to check whether your chosen provider has a list of authorized repair shops. This can help avoid paying extra fees to your mechanic. If the extended warranty doesn’t include your preferred shop, you might end up paying more for repairs in the long run. Some companies may even deny coverage for repairs they deem unnecessary, so it’s crucial to read the fine print carefully.
Flexibility
A good car extended warranty company offers flexible payment plans and the ability to roll the cost of the plan into your loan. Some dealers even encourage car buyers to buy the extended warranty as a condition of getting financing. However, this is a common scam and you should always shop around to find the best deal.
It is also important to consider how long you plan on keeping your vehicle. If you tend to trade in your car every two or three years, an extended warranty might not be worth the money. However, if you want to drive your vehicle until it’s time to retire it, an extended warranty can save you from expensive repairs down the road.
Repair costs aren’t cheap and they add up quickly. A warranty can help offset these expenses and make your new vehicle more affordable to own. Some warranty companies even offer different coverage tiers, so you can choose the right plan for your needs.
Reliability
If you find a good warranty provider, an extended car service contract can be a worthwhile investment. Many third-party providers offer multiple coverage tiers from powertrain to bumper-to-bumper warranties so you can choose a plan that fits your needs and budget. Some also offer flexible terms, allowing you to renew the coverage at the end of each term.
However, it’s important to research the provider thoroughly before making a decision. Check if they have a good track record of paying claims, and read customer reviews carefully. Also, consider how much mileage you drive each year as some plans only cover certain repairs for a limited amount of time or after a certain number of miles.
It’s worth noting that if you roll the cost of the warranty into your auto loan, it may lower your monthly payment and increase your resale value. However, this is a major commitment and you should think carefully about whether it’s the right choice for your situation.should i buy extended warranty on new car
