A car is an expensive investment, and if you plan to buy one, you must carry out thorough due diligence. Among the things you need to keep in mind are the warranties. You need to know the warranties that are worth and which ones you should stay away from.
If you’re buying used cars, you’re likely to get extended auto warranties. These are also called extended service contracts, service agreements, or mechanical breakdown insurance. No matter the name, they all mean the same thing, and most promise to pay unexpected breakdown repair costs after the expiry of the manufacturer’s warranty.
But are extended warranties worth it? Well, this depends on the individual situation. Here is a guide to extended warranties that can help you find the answers you need.
What Are Extended Auto Warranties?
Extended warranties are agreements from car dealers that will cover auto repairs after the expiry of the manufacturer’s warranty. What an extended warranty covers may vary from dealer to dealer. What Gatesauto.com offers may not be the same as what you’ll get from a different dealer.
What’s for sure is that many dealers don’t cover wear and tear or items that need routine maintenance. Most extended warranty plans include trip interruption protection, roadside assistance, and towing services.
The warranty covers your vehicle for a given number of miles, the number of years, or both. Some warranty providers will need you to pay a deductible, while
Are Extended Auto Warranties Worth It?
Unfortunately, you can’t receive a straightforward answer to this question. Buying an extended auto warranty can sometimes appear like a gamble.
You can buy an expensive plan but fail to use it. Or, you might use the plan to cover a very expensive repair that you wouldn’t have afforded without the warranty.
Here are some of the reasons you should consider purchasing an extended warranty for your used car:
If you’re the kind of person who’ll get so worried and restless after the expiry of the manufacturer’s warranty, you need an extended car warranty for peace of mind.
Consider this warranty if you don’t have some emergency savings set aside to cover you in case of any emergency breakdown.
If costly repairs interfere with your budget and take the money meant for essential purchases such as food, utilities, and rent, then get a warranty.
If you’re the kind of person who’ll give up and sell your car because of the huge repair costs, you need an extended warranty to cover the repairs for you.
Even with the above considerations in mind, there’s still a lot of due diligence you need to carry out before going for extended warranties. Here are some of the questions you should ask yourself if you’re considering an extended warranty for your car.
Who Is Doing the Repairs?
Before taking an extended warranty, read the service contract and ensure everything is in order. Check if the dealer will give you routine maintenance and repairs or not. Make sure the requirements in the contract are favorable enough and whether they can work in your case.
What’s the Transferability of the Warranty?
Are the original powertrain and bumper-to-bumper warranties transferable? If it’s transferable, check the miles left on the coverage and see if they’re worth it.
What’s the Warranty Cost vs. Common Repair Costs?
You don’t want to pay premium prices for something that you can do without. Some extended warranties are too expensive that you’d be better off paying for the repairs yourself. Get a quote from your dealer and compare it with the cost of repairs to see the difference.
Is Your Car Reliable?
Is your car reliable, or you’ll get stuck in the middle of the road because of a mechanical breakdown? Some cars are more likely to need certain types of repairs than others. Check the vehicle’s track record to determine if you need this coverage.
Reasons Extended Auto Warranties Might Not Be Worth It
While extended warranties can come in handy during tough times, there are circumstances when it’s not necessary. Here are some drawbacks that come with extended auto warranties.
Limited Warranty Coverage
One drawback of extended warranties is that they don’t cover everything. If your car breaks down, you’ll still need your claim administrator to approve the claim before any repairs take place. You also risk your claim getting declined if the contract doesn’t cover the specific breakdown.
To avoid wasting time and ending up in such situations, read your contract carefully. Only sign the contract once you’re completely convinced that the warranty will provide the kind of repairs you’ll likely need.
You Might End up Not Using It
Extended warranties are so expensive, but the worst part of it is that you might not even use them. It will be a better alternative to have savings that you can use for the repairs. You’ll save more money in the long run if your car doesn’t break down most of the time.
You Might Not Keep Your Car Long Enough
If you’re not planning to use your car for a long time or need to purchase a better one soon, you might not need the warranty. Consider finding out if the extended warranty is transferable and the new car owner can use it. This can improve your car’s resale value and easily attract potential buyers.
Do You Need an Extended Warranty?
From the information above, the decision to take extended auto warranties is solely on you. Cars are different and individual situations also vary. If you consider your vehicle’s dependability, you should learn that even the best become unreliable over time, and an extended warranty may come in handy.
Do you think you need to get an extended warranty for your vehicle? Ensure you carry out enough research and read the contract to determine if it will be the best choice for your needs and financial situation.
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