Buying A Used Car Without Extended Warranty Insurance – When to Take it and When to Leave It

Buying a used car always has an element of risk attached to the purchase as there is always the nagging doubt that you could be buying somebody else’s troubles.

Extended warranty insurance is offered by many car dealers as a sweetener to encourage you to buy their product. While the concept can provide peace of mind, it isn’t necessarily the best option on all occasions.

Let’s take a close look at when an extended warranty makes sense and when you’re probably going to be better off without it.

Are you already covered and if so how long for?

Extended Warranty Insurance as the name implies is an extension of the usual warranty period. All new cars have a set warranty period while used cars under 10 years old and with less than 160,000 kilometres on the clock are protected by a 3 month statutory warranty.

used car extended warranty insurance

Extended warranty insurance is offered by many car dealers as a sweetener to encourage you to buy their product.

Obviously when considering an extended warranty offer on a used car the first thing to check is whether the vehicle is still covered by the manufacturer’s warranty – if it is and it isn’t going to end any time soon (factory warranties can be as long as seven years on some new cars) ,then there is no need to purchase an extended warranty immediately.

You may well sell the car before the factory warranty runs out and there will be plenty of time to purchase an extended warranty if you think it is worthwhile.

How reliable is your new vehicle likely to be?

One key consideration to take into account when thinking about extended warranty insurance is the car model’s reputation for reliability. A little online research through online forums and review sites can give you a good understanding of what to expect with particular cars as they get a little older.

If the car you are looking at buying has a reputation for reliability, then the need for an extended  warranty may not be an urgent matter. Conversely, if you do like a particular model and it has a known issue with particular parts failing, an extended warranty becomes a necessity. You can never be too sure with used car performance, so an extended warranty will offer all important insurance against mechanical failure.

Even when an extended warranty seems to be an attractive option there are still a couple of important points to take care of.

What type of Extended Warranty Is It?

The first is the type of extended warranty being offered. An exclusion warranty is more often than not a far better option than an inclusion warranty.

The exclusion warranty will list the items not included in the warranty, typically items like CD players, batteries and lights will be listed as excluded items.  An inclusion warranty will limit you to specific items covered by the warranty and will more likely than not result in any claims for items not listed being disallowed.

The important thing to do is to focus on what items are not covered. When there is a long list of items not covered, the value of the warranty is  limited.

How Much Will It Cost?

Price is always a consideration when purchasing extended warranties. Will the amount you pay and the resultant peace of mind be worth the cost of cover?  Naturally the perceived value of the warranty will be influenced by the reliability of the car, the cost of the car and the price of spare parts.

All of these things need to be factored into the value equation.  If the cost outweighs the benefit, then you’re best to walk away, but if it looks to be a reasonable price to pay for extra security  then by all means take that extended warranty.


Ultimately, extended warranties will give you some added comfort that if something does go wrong with your vehicle, you will have some protection.  If you keep these points in mind you will be able to choose an extended warranty that will serve your interests well.

Posted in Used Car Extended Warranty Insurance

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