If you’re like many car owners, you enjoy paying off your vehicle and then holding onto it for awhile, sans car payments. Or maybe you dread the often-stressful car-buying process and prefer to keep your vehicle as long as possible for that reason. Considering most manufacturer’s original warranties protect you anywhere from three to 10 years, or between 35,000 and 100,000 miles, you may be tempted to purchase an extended warranty if you plan to keep your car beyond those parameters. Before you sign on the dotted line, though, be aware of the following pros and cons of extended warranties.
As with any insurance policy, the biggest benefit of an extended warranty is it protects you from financial distress when something goes wrong. According to various studies on the subject, if your vehicle suffers a catastrophic failure after your original warranty expires, the price of an extended warranty is usually less than the price of the repair. In other words, an extended warranty can pay for itself the first time you use it for something major.
One smart way to reduce the cost of an extended warranty is to pick and choose the coverage options you feel you’ll be most likely to use, and opt out of others. For instance, you may decide to purchase an extended warranty to protect against power train failures but forego bumper-to-bumper coverage.
Of course, the main question regarding the purchase of any insurance or warranty policy is, “Will I ever use it?” It’s possible you’ll buy extra coverage and never need it. It’s up to you to consider your budget, tolerance for risk and ability to absorb unexpected repair bills should they arise. Everyone’s financial situation is different so there’s no “right” or “wrong” answer to the question, “is an extended warranty worth it?”
Additionally, if your warranty provider determines you’ve failed to adequately maintain your vehicle, you lack the records to prove your maintenance history or you have modified your car in a significant way, it may deny your claim. Few things are as frustrating as paying for insurance or a warranty only to be told you don’t qualify to use it when you need it. Similarly, some extended warranties only cover specific repairs. Make sure to read the fine print to ensure the extended warranty you’re considering isn’t overly restrictive. Also, before you buy, make sure you know exactly what you’re buying and what the warranty will and will not cover.
There are many factors to consider when purchasing an extended warranty. If you’re on the fence about whether you need one, contact us at Deboer's Auto Sales and Service. We’re happy to look over the policy you’re considering and give you unbiased guidance. We encourage you to count on us to assist with this and any other vehicle-related issues you’re struggling with.
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