If you’ve ever purchased a car at a dealership, you have probably been offered an extended warranty. Many people refuse this option, but like many other items, as soon as the manufacturer’s warranty ends things begin to go wrong. When you suddenly have to pay for a new this or that because the warranty is out you may rethink your decision not to pay for the extended warranty. Don’t let car expenses drain your savings; make an investment when you purchase your new car and opt in on the extended warranty.
Manufacturer’s Warranty
A typical manufacturer’s warranty on a new vehicle is designed to cover certain parts of the car for a specific period of time. A basic manufacturer’s warranty may cover parts against defects for 3 years or 36,000 miles. During this time items that may be defective from the factory will be replaced or repaired free of charge. The important thing to understand about a manufacturer’s warranty is that the only parts covered are those listed in the warranty and those that fail or break due to the manufacturer’s negligence. Regular wear and tear on parts is not covered. Then you have to consider how long it will take you to get to 36,000 miles and what happens to your car at 36,001 miles.
Comprehensive Extended Warranty
One way to look at the extended warranty is as comprehensive repair insurance. While full coverage insurance will cover damages caused to the vehicle in an accident or natural disaster, it is not used to cover part repairs. So, imagine that you’ve just rolled out of your manufacturer’s warranty mileage limit and all of a sudden you discover that your reliable car has blown a head gasket. If you take your car to a repair shop without having extended warranty coverage you will be paying for parts and labor. This simple gasket replacement could cost you nearly $1000. If you have an extended warranty, you don’t have to worry about unexpected parts repair.
What to Consider Before Purchasing an Extended Warranty
While the salesperson may be very convincing, it is important to go into the extended warranty discussion with a plan. There are a few things you will want to ask yourself before you sign on the dotted line:
- How long will you have the car? If you’re going to be trading your car in within a few years it may not be worth purchasing the extended warranty. However, if you plan to drive your car until it just can’t go another mile then you will likely benefit from the purchase of an extended warranty.
- Are you getting the best price from the dealership? Always shop around with independent warranty companies before you make a purchase at the dealership. You may find better coverage at a lower price.
- What is covered? This is a huge question that will make a difference in the warranty you decide to purchase. There are coverage tiers, wear and tear clauses and other things that make it difficult for consumers to choose the extended warranty they need. Do your research before you make a commitment.
Making a vehicle purchase is a big decision in and of itself. When you get down to all the possible problems you can encounter while on the road with a new car, you can see why good insurance and an extended warranty are important. Whether you purchase your extended warranty from the dealership or an independent company, you will want to invest to protect your new car and save yourself money further down the road.
