Buying an extended warranty for your car can help take some of the sting out of unexpected repair bills. But such plans can be expensive – often costing thousands of dollars – and they may not pay off if you never need to use them. It’s important to carefully consider your options before deciding whether such coverage is right for you.
You might be offered an extended warranty when you’re signing up for a loan or purchasing a new vehicle at a dealership, but you can also find them online from third-party providers. Many credit unions and insurance companies also offer them, as do many manufacturers.
In some cases, you might be able to negotiate the price of an extended warranty. In fact, some of the products on the market are backed by the manufacturer of the car you’re purchasing or by the dealership itself, while others are provided by third-party providers with varying track records.
Before you make a purchase, find out who stands behind the product and research its reputation in the marketplace. You’ll also want to understand how the warranty works, including any deductibles you’ll have to pay in the event of a claim and whether it covers only certain parts or the entire vehicle.
Another consideration is how long you plan to keep your vehicle. If you know that you usually trade in vehicles after a few years or so, an extended warranty might be worth the expense. But if you’re planning to hold onto your vehicle for 10 or more years, it might be a better idea to skip the extended warranty and instead set aside that money to cover repairs as they come up.
Finally, it’s worth considering how the extension works in terms of where you can have your vehicle repaired and what kind of quality of replacement parts will be used. For example, some warranty contracts might only allow you to have repairs done at a dealer or require that the repair be performed by a particular shop using factory-approved parts.
You’ll also want to find out if the company offers a refund policy, in case you change your mind or have buyers’ remorse. It’s also a good idea to review the length of the contract, as some run for a specific number of years or miles and others expire after a certain amount of time or after the vehicle has passed a certain mileage limit. Finally, you’ll want to determine whether there are any extras like roadside assistance or rental car benefits, as these can add up quickly. buy extended warranty for car