Extended Car Warranties: You Should Know
If you’re in the process of purchasing a new or used car, you’ll probably soon be offered an extended warranty on your vehicle. It’s best to understand what the warranty covers and if it’s worth it.
An extended warranty is an ‘insurance policy’ that covers certain vehicular repairs, it typically begins when your car manufacturer warranty expires. There is a difference between the two though. In most cases, your extended warranty doesn’t cover everything your manufacturer warranty covers. In fact, many extended warranties don’t cover oil changes, new tires, new brakes, or roadside assistance.
There are two types of extended warranties: Manufacturer and third party. The car dealer may offer you a third party extended warranty, which according to experts won’t be as sufficient as the manufacturer’s extended warranty. We recommend always using the manufacturer's warranty for coverage and price; if you decide to make the purchase.
So should you buy an extended warranty at all? A Consumer Report Survey showed, 55% of those surveyed never once used their extended warranty! Furthermore, only 25% of those surveyed said they would buy one again. The costs of extended warranties on average range from $1,000 - $3,000. This price may be more efficiently used without the warranty - especially because you may never end up using it.
While extended warranties aren’t recommended by the experts, there are a few instances where you should consider making the purchase. For example, if the car you’re purchasing is extremely unreliable - which you can check with reliability reviews of the vehicle - then the costs associated with getting it fixed frequently may make the extended warranty worth it