We’ve all heard the commercials and answered the phone calls. There seem to be a lot of people concerned with our extended warranties. Here’s the thing, though, an extended car warranty can be a great asset to you, depending on what kind of driver you are and what kind of car you have.
If you read these Protect My Car reviews, you’ll see a great breakdown of what an extended warranty is and how these warranty plans work. For the most part, you can expect that extended warranty coverage will protect certain auto systems, like the powertrain and engine. Some of these warranty plans also provide services for towing your car should you need it and reimburse you for car rental costs while your car is being repaired.
Extended warranties are not the same as factory warranties, and you should investigate the details of any extended warranty agreement before purchasing coverage. For example, not everyone needs extended coverage, and not everyone can afford it.
Below is a quick list of seven things to look for when you’re buying an extended warranty for your car.
1. Do You Need an Extended Warranty?
Extended warranties are designed to cover repairs after a factory warranty has expired. You should always read the fine print to see what the extended warranty is likely to cost and which parts of your car the warranty will cover. This way, you can see if you’d be saving money with the additional coverage.
Not everyone would benefit from an extended warranty. For example, if you drive an older car one that’s likely to get totaled in even a minor accident, extended warranty coverage may not be for you. Also, if you’re the kind of driver who likes to trade vehicles often, you probably won’t benefit from extended warranty coverage.
Meanwhile, newer cars are likely still under a factory warranty for a certain number of miles or years. You don’t need extended warranty if the factory warranty is still active. Always investigate the status of your factory warranty before purchasing additional coverage.
If you like cars in that sweet spot between five and 10 years older, or you own a vehicle that’s probably going to need a lot of repairs, you might benefit from the added protection brought by extended warranty. The same is true if you drive a luxury or sports car.
2. What Does an Extended Warranty Cover?
Extended warranties range in the amount of coverage they offer, but you should expect something like your factory warranty, except perhaps a bit more specific. You may choose to go with a powertrain warranty that will cover the engine and other major parts like the transmission. You could also go with an extended warranty with a bumper-to-bumper policy, which should cover most auto parts and systems.
Tires, paint jobs, and accessories are often covered under a separate warranty, but you may be able to bundle them. You should look closely at what your extended warranty covers and never assume something is covered just because it breaks. Many bad reviews of extended warranty companies are the result of the customer not understanding what was covered under his or her warranty.
Depending on your car and the amount of mileage you plan to put on it, you may anticipate more or fewer repairs in the future. If you think you will be putting a lot of money into your car for repairs or upgrades, it may make sense to opt for additional after-factory coverage.
Likewise, if you drive a luxury or sports car, you can expect your repairs to be more expensive and therefore warranty coverage can be a real wallet-saver.
3. What Does the Extended Warranty Cost?
Speaking of wallets, what’s this extended warranty coverage going to set you back? That again depends on the make and model of your car, mileage, and other considerations such as the plan you choose. You can expect to pay more for more coverage, such as the bumper-to-bumper option, or if you opt for additional services like roadside assistance.
The best way to know if an extended warranty is worth the money is to do a quote search at local body shops and service stations. Find out what general maintenance and specific repairs are likely to cost for your vehicle. Most good mechanics will be able to tell you what you can anticipate for your vehicle in terms of repairs.
There will always be unexpected costs, so don’t spend too much time comparing prices. However, you should know pretty quickly if you would rather pay for those repairs out of pocket as they come along or pay upfront for warranty coverage you may never use.
4. Is the Extended Warranty Transferrable?
Some warranty companies offer a transferrable warranty for a fee. That way if you sell the car, the new owner can benefit from the coverage you’ve already bought and choose to continue that coverage. Be sure to check with the warranty company before you purchase or before you sell the car.
5. What are the Other Benefits of the Extended Warranty?
Some warranties come with other benefits included or as optional add-ons. You should ask about roadside assistance, trip reimbursement, or rental car coverage when you are signing up for an extended warranty. Sometimes these options come standard with the plan you choose, but sometimes they are available for an additional fee. You should determine whether you’re likely to use these services and what they cost out of pocket before you decide.
6. How Long is the Extended Warranty Good For?
Again, the coverage length is going to depend on you and your car’s needs. Most warranty services will cover a vehicle for two to seven years. If you plan to keep your vehicle for a while, you may benefit from long-term coverage. Keep in mind that the older your car is, the less likely it is to benefit from extended coverage.
Most companies do not cover normal wear and tear. It’s also best to see if your extended warranty is transferrable in case you decide to sell the vehicle. If you plan to sell your car after only a couple of years, you may want to skip this coverage altogether or go for a shorter plan.
7. Does the Extended Warranty Meet Your Budget?
The paramount question is, can you afford extended warranty coverage, and can you afford to be without it? Depending on your car and your needs, you may decide that extended warranty coverage is the best choice for your vehicle. In that case, you should be prepared to shell out for a premium that you may never use.
Chances are, your vehicle is going to need some repairs in the time you own it, so this is not throwing away money. However, the worst-case scenario involves you not needing coverage because your vehicle doesn’t need to be repaired.
This is like paying for your car repairs in advance and in monthly installments, rather than having the surprise of an unexpected car repair payment. If you would be financially devastated by an unexpected repair, you may want to budget extended warranty coverage into your monthly bills.
The Bottom Line
Whether or not you decide to opt for extended coverage is going to be a decision that’s based on your needs, your vehicle’s stats, and your budget. You may decide to deal with repair expenses as they become a problem, or you may decide that spending the money every month is worth the peace of mind that comes with knowing your car repairs are covered.