Written by Tim Marsh
Anytime you buy a car, the inevitable question comes up: do you want to buy an extended warranty for a car. Before you look at the cost and answer a definitive ‘no’, it’s worth knowing the pros and cons. You cannot possibly say that you don’t want the car warranty until you look to see if it is financially worth it.
The Pros
When you look at purchasing extended car warranty insurance, you have to consider what it is going to actually cover. In
Pros and Cons of Buying an Extended Warranty
most instances, it will cover repairs to the expensive technology found inside your car. The manufacturers of today’s market are using more technology than ever before. When it breaks, it can cost you a fortune to repair – unless you can pull out an insurance policy that covers it.
Paperwork is Done
Licensed insurance agents or dealers will often take care of all the paperwork and add the insurance to your payment. This means you don’t have to worry about taking the time to fill out any documents or remember to make a payment. It can be done automatically as soon as you say you want it.
Transferrable
A genuine warranty can be transferred to a new owner. This means that if you choose to sell your car before the car warranty is up, you can simply transfer it – which is a perk that you can offer. You also have the option of cancelling the unused portion and getting a refund. You choose the method that works best for you and your finances.
Extended Coverage
Genuine warranty covers towing and emergency accommodation if needed. Cars are built to last, though the standard warranty will usually only last about 3 years or 56,000 kms. If you plan on driving a car for longer than that, it’s likely that something will go wrong. To avoid being financially responsible for that something wrong, the extended car warranty insurance can help you out significantly.
The Cons
Genuine Extended Car Warranty is Not Cheap
Genuine Extended warranties can be not cheap. You are ultimately taking the chance that the repairs are going to be more than the cost of the warranty. Some people are right and some people are wrong. Your best bet is to customise the warranty to your needs. Read the review boards on the car you bought and be sure that the insurance policy covers the things that typically go wrong.
All Repairs Aren’t Covered
Another con is that some non-genuine extended car warranties do not cover all the repairs. Many people assume that it will cover each and every repair. However, there is something known as an “exclusion list” that you will want to read over. This will detail all the parts, repairs, and systems that are not covered by the warranty you are about to buy.
Approved Mechanics
Access may also be limited to a list of approved mechanics. If you purchase a car warranty at the dealership, you may be limited to having your repairs done at that dealership. If you move to another area, you would have to bring your car back to that dealership – and that is a significant inconvenience.
Tips for Buying an Extended Warranty
When you are ready to look at extended car warranty insurance, you have to choose a provider. There are pros and cons to manufacturers, dealers, and independent companies. The lowest cost is usually found with an independent company, though you have to review the paperwork with a fine tooth comb to read the exclusions and ensure you are purchasing from a reputable company.
You also have to know what to look out for so you don’t become the victim. You should be able to transfer the warranty, choose the repair shop you want to go to, and even be given the opportunity to have repairs taken care of without any money out of pocket. You should also look to see if they will provide a loaner car while yours is in the shop.
It all comes down to knowing the bottom line. You cannot expect to get the best warranty if you don’t read the fine print. Be able to answer all the questions about the policy before you sign the dotted line and start paying for an insurance policy. An extended warranty can be a positive thing, but only if you go with a reputable company that has your best interests in mind.
