Whether or not you should buy an extended car warranty is a question that comes up for many vehicle buyers. Some people believe that it is not worth the added expense, while others claim that it has saved them thousands of dollars. While the answer to this question will largely depend on your personal situation, there are some key points that you should consider before making a decision.
Do You Want the Peace of Mind That Comes with a Car Warranty?
Some people find that an extended warranty is well worth it because it offers them the peace of mind that they will be able to afford any necessary repairs. Considering the fact that auto repair bills can easily run into the thousands of dollars, having a warranty in place may provide you with the financial protection you need to feel confident on the road.
However, if you are comfortable with saving up for the repair costs or have a good relationship with your mechanic, an extended car warranty may not be necessary. You can also save up money for car repairs by following your manufacturer’s maintenance schedule, which will help to ensure that small issues do not turn into big ones.
If you are purchasing a new vehicle, the manufacturer’s warranty will likely cover any repairs that you may need. For used vehicles, it is a good idea to look into third-party car warranties in order to find the best deal. Many dealerships will try to inflate the cost of these warranties in order to make a profit, so you should shop around to find the best deal.
In most cases, extended car warranties will only cover major repairs and not routine maintenance or other small expenses. You should read the fine print carefully in order to fully understand what is and is not included in the coverage. You should also check to see if there is a deductible or how reimbursement works. In some cases, you will be required to pay the deductible for a repair before your warranty company will reimburse you.
How Long Do You Plan to Keep the Vehicle?
Many people who purchase extended warranties never end up using them, so they are effectively paying for something that they may not need. If you plan on keeping the vehicle for five years or more, an extended warranty may be worth the extra cost.
However, if you are planning to trade in the vehicle within two or three years, you will probably not get your money’s worth out of an extended warranty. You could instead choose to open a savings account and set aside the money you would have spent on a warranty, which you can then use for future repairs. This can be a much more flexible option than having to pay for a warranty that you may not end up needing. This is especially true if you are financing your vehicle, as the car loan will make up the bulk of the cost. is an extended car warranty worth it