Written: Tim Marsh
The moment you buy a car, new or used, you are confronted with the decision of buying an extended car warranty. Car troubles can be expensive, so when your vehicle’s standard warranty runs out, you may want to consider such a warranty to provide you with some added protection. It’s important to understand the benefits as well as the drawbacks so you can make the right decision.
How does an extended warranty work?
An extended car warranty is simple. It begins when the manufacturer’s warranty runs up. It will protect the mechanical,
electrical, and electronic parts when they malfunction. In most instances, you will only have to spend a small amount of money on the repairs – though this will vary depending on whom you purchase the insurance from.
What are the benefits?
There are a number of benefits to extended car warranties. For the most part, it is going to provide you with peace of mind, knowing that you have an extended warranty to protect you against anything that may go wrong with your car. Even when it starts to malfunction, you will have protection in place to ensure you don’t spend a lot of money.
- You will be able to safeguard your asset. Many people begin to experience problems the moment the warranty from the manufacturer expires. If you have purchased the added warranty, these problems won’t be an issue for you.
- You will also be able to get a better resale value. Should you decide to sell the car while the extended warranty is still in place, people will be more apt to buy the car from you. In many instances, you will have the ability to transfer the warranty to the new owners, which allows them to take advantage of the benefit as well.
- You will often have payment flexibility, too. This means you will be able to make instalments on the warranty or make one payment in full. You can choose the method that works best for your budget.
- Another benefit is that you will have an array of perks. This will include roadside assistance, which means you never have to worry about being broken down on the side of the road. It goes back to having peace of mind as a car owner.
What are the drawbacks?
As with everything, there are some drawbacks that you need to be aware of.
- Extra expense: The first thing to be aware of is that the extended vehicle warranty is an added expense. This is on top of insurance, petrol, vehicle registration, and everything else that you already pay. You have to make the decision as to whether it is an expense that you can afford.
- Exceptions: There are also going to be limitations with the insurance. For example, some repairs and parts won’t be covered by some non genuine warranty providers . You will have to pay for your own tires, oil changes and other routine maintenance. Some non-genuine warranty providers also require you to maintain the car to a certain level. In the event that you don’t get your oil changed every three months, it could cancel the warranty.
Read more on our recent blog post on Pros And Cons Of Buying An Extended Warranty For A Car
What to consider before buying the insurance?
At the end of the day, you have to decide whether you need an extended warranty or not. Looking at the mileage on the car and how long you plan on keeping it will help you to answer this question.
The provider of the warranty has to be a consideration as well. You can buy from the manufacturer, the car dealer or an independent insurance company. There is a list of pros and cons with each. You may also want to read reviews to see how the customer service of each company is. This will ensure you know what you are in for once you do get an extended warranty policy from a particular company.
You also have to look at the level of coverage. Reading the fine print in terms of what is and isn’t covered is important. You also have to determine where the repairs can be made. Some require you to go back to the dealership while others have a long list of providers all over the country.
The cost of the insurance needs to be taken into account as well. Be sure to price out the cost of the insurance with a few different companies to see who has the best deal for you.
Extended car warranties can be beneficial, but only you can decide whether one is right for you.