6 Benefits of Extended Car Warranty

Written by Tim Marsh:

Congratulations on the purchase of your car, a significant investment that you likely devoted a great deal of time and consideration to. Now, you are probably toiling over whether to purchase a new car warranty. Many consumers are torn over this decision and with so many arguments on both sides of the debate; the final decision can be difficult. However, while there is no right or wrong answer to the question of whether to invest in a warranty, there are many reasons why a vehicle warranty could be one of the best decisions you make for you and your vehicle.

There are basically three types of warranties:

New Car Warranty 
This warranty is for vehicles still under original manufacturer warranty, but extends the manufacturer’s warranty by 1-4 years. This is not a dealer extended warranty if you service it with us; see the used car warranty for that.

Assured Warranty 
This option is for used vehicles up to 8 years old and within 120000 klms. It will cover up to the market value of your purchase with no cap limit per claim.

Used Car Warranty
This one is the offers the most limited coverage. This option is only worth it if there are no other options. Used car warranties typically only cover up to $2-3k per claim if the vehicle has already accumulated more than 120000 klm or is more than 8 years old. This is often the warranty dealers give when they provide an extended new car warranty. This is nothing more than a ploy to force you into service for the next 6 years, regardless of the cost to you, when the actual warranty covers virtually nothing if something goes wrong.

Being equipped with some general knowledge about the different warranty options available may make the decision a bit easier. However, many consumers are still torn over this decision and with so many arguments for and against warranties; the final decision can be difficult. While there is no right or wrong answer to the question of whether to invest in a warranty, there are many reasons why a vehicle warranty could be one of the best choices you make for you and your vehicle

Guaranteed Ability to Repair Your Vehicle

As a smart consumer, you probably know that the better you care for your vehicle, the longer it will last. So, you may be committed to

Family Broken Down On Country Road

6 Benefits of extended car warranty

the recommended maintenance and routine tune ups the car will need. However, while that commitment will extend the life of the vehicle, it cannot guarantee that repairs will never be needed. Like any machine, all cars eventually need repairs of some sort.

With this realisation in mind, you are faced with a query: will you be able to afford repairs when they arise? It is a difficult query to answer because there is no way of knowing when most repairs will be needed or how much they will cost. This is the most practical reason to purchase an extended car warranty. Regardless of your financial situation at the time your car needs a repair; the warranty will ensure that you are able to afford to take care of it quickly and easily.

More Comprehensive Coverage

At this point you may be thinking, “But the car came with a dealer’s warranty, why should I pay for another one?
While it is true that most dealers offer a used or new car warranty when you purchase a car from them, the used or new car warranty they offer is typically very limited. This means that the majority of repairs you will need are either only covered to a certain amount or not covered at all. In fact many dealers’ warranties only cover the first $2-3,000 per claim; this may seem like adequate coverage, but anyone who has ever had to have two or three repairs at once knows that it can be just a small drop in a very large bucket.

Peace of Mind

The security offered by an extended car warranty if another reason many people choose to buy. With most forms of protection, such as life insurance, auto insurance or home owner’s insurance, you hope you will never need the coverage, but when the unexpected occurs, you are glad you invested in the safety net for yourself and your family.

The same is true for a new or used car warranty; you do not anticipate the need for an engine overhaul or a new transmission, but if the need presents itself, can you afford thousands of dollars in repair bills? In today’s unstable economy, most consumers are not equipped to handle such a situation and those who are usually prefer to spend their savings elsewhere.


Some consumers simply like the savings an extended auto warranty offers; it is like financing potential repairs at below cost. Additionally, depending on the coverage you choose, there may not be any out of pocket expense to you. Therefore, the cost of your repairs is merely the monthly premium you pay for your warranty. In most cases this is much more reasonable than the charge would be without a new or used car warranty.


If the cost savings does not appeal to you, what about the assistance you receive from the knowledgeable staff from the company that backs your extended vehicle warranty? Although some consumers are well educated in automotive information and experience, many are at the mercy of the professional mechanics and staff of the repair shop they use. There is no problem with this if the professionals are honest and trustworthy, but you cannot always take them at their word. Unfortunately some automotive professionals will take advantage of consumers who are not proficient in automotive expertise.

However, a customer who has an extended auto warranty has a powerful advocate behind him. Not only does your car warranty inform the automotive shop that you are not alone, it also offers you immediate assistance if you feel you are treated unfairly. On your own, it could be difficult to attain justice, but as a car warranty holder, you have support. Not to mention that the shop undoubtedly wants to stay on good terms with the warranty company, so they can continue to get their business.

Increased Resale Value

The final reason a car warranty is favourable is because it increases your resale value. When you first buy your car, it is hard to imagine ever selling your car. However, as time goes on, you may decide you want to upgrade to a newer model. When and if the time comes, offering an extended warranty as part of the car’s package is a great selling point. Not only does it provide the same protection that was so attractive to you, but it also tells the potential buyer that the car was most likely well maintained, since most issues were covered. If the potential buyer is undecided, the presence of a warranty may just seal the deal.

Leave any comments below for the Author Tim Marsh if you have any!


Posted in Car Insurance Blog, New Car Extended Warranty Insurance

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