The Benefits of Extended Warranties
It is a fact that consumers are now keeping their cars for longer periods of time because new cars now come with complex technology and more electronics, making it more appealing for them to keep it as long as possible. This is where extended warranties may be appealing. All warranties, expire on average within 3 years or 36,000 miles. This article is here to explain how you could benefit from an extended warranty.
Keep reading to find out more about extended warranties and how they may benefit your car in the long run.
What is an extended warranty?
An extended warranty or a vehicle service contract is an optional plan you can buy to help you pay for the cost of parts and labor your car may need while you own it. The warranty usually begins when the manufacturer’s warranty expires. They also may not cover everything a manufacturer’s warranty covers, so please make sure you are well educated and working with a reputable company.
If you buy a used car from the dealer, it may not be covered by the manufacturer’s warranty anymore, so an extended warranty might be the way to go. It will provide you with the coverage you need. Be careful of telephone solicitors selling extended warranties, they are not reputable sources!
How much do they cost?
The coverage of extended warranties vary and the costs associated with them are based on what they cover and the make and model of your car. The upfront cost of the warranty can range from $1000 to $3000, so it’s definitely not cheap but will help provide you peace of mind and help you with more costly repairs that could range higher than that.
Depending on if you want to roll the warranty into your loan, you’ll have to pay interest on it and sometimes a deductible. Deductibles can come per repair or warranty service visit. So, it’s important to find out the deductibles on the plan. If you are purchasing or leasing a vehicle, you can include the warranty cost in your loan amount.
You Can Tailor the Warranty to Specific Needs
Original warranties vary when it comes to mileage and time, so companies that provide extended warranties might offer a greater variety of products and services than they would have before. An example for this could be 24-hour roadside assistance for new vehicles that don’t have that coverage from the car manufacturer. Or if you have a long powertrain warranty but a short bumper-to-bumper warranty, an extended warranty could help you extend the shorter one.
You can also decide how long you want the extended warranty to last, depending on what other types of coverage you have. Make certain you understand the differences between a powertrain and a comprehensive extended warranty. Also, be careful not to assume a bumper-to-bumper warranty cover the entire vehicle- they typically do not!
They Cover Costly Repairs and Technology
Since modern vehicles have a lot more technology than before, there is much more electrical and computerized equipment. This can result in many possible system failures which can be expensive to fix. An extended warranty can help you here, where you can include these expensive and tricky features in it, as well as other systems.
Dealers Take Care of Paperwork and Payment
Buying an extended warranty from a dealership or it being sponsored by the manufacturer can be more expensive, but it comes with the benefit that they take care of the paperwork and the manufacturer pays the dealer directly for services rendered. These warranties usually allow the vehicle owner to get the vehicle repaired at any same-brand dealership anywhere in the country. This helps remove restrictions that can sometimes be excluded from third-party warranty providers.
Peace of mind
The most important thing an extended warranty will give you is peace of mind. If you are a person that is not willing to take the risk that comes with not having a warranty, then it is better to purchase one. An extended warranty is like car insurance; we don’t like paying for it, but we’re glad we have it when it’s needed.
What you need to know
Extended warranties are not all-encompassing. Most wear and tears associated with your car are not covered by them. They also come in coverage tiers (like gold, silver, platinum), each with its own price, term and coverage. It is important to know what is covered and what isn’t, so read the fine print.
Another point that is important to know is who will cover or underwrite the repair costs. Are the repairs fully covered? Do you pay a deductible? Do you pay for the repairs and get reimbursed later? Are you working with a Best Triple A (AAA) rated company? These are all important questions.
How long are you keeping the vehicle?
If you plan to keep the car for a long time, an extended warranty might be right for you. If you’re only planning to keep it for a few years and you are buying it new, the manufacturer’s warranty might be all you need and an extended warranty might not be necessary. However, if you are planning on keeping your vehicle beyond the manufacturer’s warranty terms, an extended warranty is highly recommended.
Type of Car
It also depends on how old the car is when you buy it. If it’s new, it is less prone to have issues, whereas older cars might have more problems and might not have a manufacturer’s warranty anymore. Make sure you do your research before determining if you need an extended warranty. Some car brands are more prone to breakdowns than others.
Will you regret getting it? Or not getting it?
Predicting the future is an impossible task. If you plan on owning your vehicle beyond the manufacturers warranty terms, you should seriously consider buying an extended warranty. Keep in mind that an unexpired extended warranty can add value to your vehicle at trade-in, or may qualify you for a pro-rated refund if cancelled at the end of your ownership.
When buying a car, be it new or used, it is important what you are getting when it comes to warranties. Make sure to talk to your dealership to make sure you know what is involved with extended warranties and how you can make it the best thing for you.