If you are considering buying a car, be it new or used, you might be thinking of buying an extended warranty to protect you & your family on the roads. But is an extended warranty worth it? Does it cover all the significant parts of your car? Read on to know more about it.
An extended warranty is an ideal plan that protects you from paying expensive repair or replacement bills. Generally, it starts when the manufacturer’s or basic warranty expires, but sometimes the two overlap.
Extended warranties come with a high price and do not cover everything. Its length, whether in time or miles, varies widely. Some warranty providers provide comprehensive coverage for significant parts of your car, while others may include powertrain or specific components.
Extended warranties don’t cover maintenance, such as new tires, oil changes, new brakes, etc.
Some extended warranties will specify if you can use OEM or aftermarket parts for repairs or replacements. Often, warranties range in length from 3 to 5 years or up to 60,000 miles.
You should check with the warranty providers the length of time or miles driven before choosing the best fit for you.
The price of extended warranties is negotiable. Just like the coverage, the price varies depending on the plan you choose and the model of your car. Usually, the upfront cost of an extended warranty ranges from $1,000 to $3,000. If the warranty is combined with your auto loan, you will have to pay potential fees & interest amounts.
With an extended warranty, you may be required to pay deductibles one of the two ways: per repair or per visit. To avoid paying multiple deductibles, determine how they work for your plan.
An extended warranty can be an attractive solution for expensive repairs. But before buying it, consider both pros & cons.
The benefit of an extended warranty is you can protect yourself from spending on a costly repair, provided it is covered under your warranty. Instead of paying the entire bill, you will have to pay only the deductible, if applicable. The warranty provider would pay the remaining repair amount.
Another significant benefit is, you can have peace of mind as you need not worry about costly repairs or replacements.
An extended warranty has its own drawbacks. These include:
If the extended warranty coverage period overlaps with the manufacturer’s warranty, you may be paying an extra amount for a warranty that you already have. With a new car, it will likely not be in effect until your basic warranty expires.
If your car does not require any repair, your extended warranty goes unused. And if the car needs repair but if the cost is less than the cost of the warranty, the huge amount you paid is wasted.
The wear & tear parts of your car are not covered by the extended warranty. In fact, the warranty covers only a few aspects. If uncovered parts require repair, you will have to spend an extra amount.
Most of the extended warranties require the dealer, manufacturer, or third party to pay for repairs. If the entity responsible for paying the bills goes out of business, you will be left with a warranty that is of no use.
Some warranties may not make the complete payment. Instead might pay only a portion of the repair or replacement bill, based on your car’s mileage.
You may not be allowed to have your car repaired in your desired facility but only in certain facilities.
If you’re purchasing a new car vehicle and have funds to cover basic repairs, then an extended warranty can be an unnecessary expense. Instead, you can look for policies that offer full coverage against physical damage due to fire, theft, accident or vandalism, etc. But if you can’t afford to pay for repairs at least for a few years, then an extended warranty might pay off.