An extended warranty on a car can cover parts and labor costs for a specified time after the manufacturer’s warranty expires. The biggest advantage of this type of plan is that it can save you money if you ever need to pay for a costly repair, since you’d only be responsible for the deductible (if applicable). Extended warranties are usually offered by third-party providers rather than car manufacturers, and many have several different coverage plans from which to choose. We recommend doing some research on providers before deciding which one is best for you. Check online reviews, Better Business Bureau ratings and more to find out how past customers have rated each company. Then, look at each plan to see which covers what you need it to cover.
Is an Extended Warranty Worth It for You?
Some drivers feel more comfortable on the road knowing that major repairs are covered, even if they can’t afford them. This can be especially true if you drive an older car with a history of reliability problems, or a new car that’s still under the manufacturer’s warranty.
You may also want an extended warranty if your budget is tight, or you’re purchasing a used car and aren’t sure about its mechanical condition. However, you should consider how much you’ve already paid for out-of-warranty repairs in the past and compare that to the price of the extended warranty before making a decision.
It’s important to remember that extended warranties aren’t regulated the same way that insurance is. This means that warranties can be overpriced. If you’re buying a warranty at the dealership, ask to get the quote in writing and shop around before agreeing to buy it. Also, keep in mind that you can sometimes roll the cost of a warranty into your auto loan, which could end up saving you a lump-sum payment.
Finally, be aware that some extended warranties come with service requirements that can limit where you can have your vehicle repaired. You should research the reputation of your potential provider, including customer satisfaction and complaint histories, before you sign up. And you should know that most extended warranties can be canceled if you decide they aren’t right for you.
If you’re uncertain about whether an extended warranty is worth it, consider asking the F&I manager at your dealership for recommendations. They can often help you find a good third-party provider that will offer competitive prices and comprehensive coverage. And remember, most warranties can be canceled after you’ve signed, so you have some flexibility if you change your mind. If you are still unsure, consider a repair savings account instead of an extended warranty. Financial guru Dave Ramsey suggests setting aside half of what you’d spend on a warranty to take care of any unexpected repairs, which will be more affordable in the long run. And if you don’t end up needing to use the funds, they can go toward your next car purchase. is extended warranty for car worth it