Important Information on Extended Warranties From Car Dealers

Car dealers offer extended warranties to provide their customers peace of mind that they’ll be covered should something unexpectedly go wrong with their vehicle. However, there are times where purchasing a warranty will be in your best interests, and other times where it will not. Here’s some information on how to tell the difference and to buy the one that is best for you.

What It Is

An extended warranty can be compared to insurance. You pay for liability coverage in case you’re in an accident and someone is hurt, although you don’t expect it to happen. In the same vein, a warranty will cover you if your vehicle needs a repair that you didn’t expect.

What to Look For

It wouldn’t make much sense to pay for a partial coverage plan – if you’re going to get a warranty, don’t go halfway. You’d be surprised at how many people make this mistake and not only end up paying for the coverage but for a large repair bill as well. Get the most coverage you can afford so you can rest assured it will be there should you need it.

Car dealers typically offer a wide range of options, so you’ll want to do a little homework before you purchase your new vehicle. Have the best possible idea of what will be covered and ask the right questions. For instance, get the amount of the deductible, find out what components of the vehicles are covered, and ask whether or not you need to take it to a certain shop for repairs. In addition, find out if you’ll have to pay for your rental car and any towing that may be needed.

Generally, car dealers offer power train warranties that cover any problems with the drive shaft, axles, transmission and engine. Again, make sure you know the exact parts that are covered. The most comprehensive type of plan is typically known as “bumper to bumper.” This will cover just about all your vehicle’s parts.

Setting a higher deductible could help you offset upfront costs; you just need to remember to set aside extra money should something go wrong. Does your credit card offer free roadside assistance? If that’s the case, then you can take towing off of your warranty and save a little money that way.

Is It For You?

If you have a deep emergency fund and could financially withstand having to pay for a big problem, then you might be fine if you didn’t purchase a warranty. However, if you’re like most people and you couldn’t handle a repair bill in the thousands of dollars, then you’ll more than likely be better off paying for a warranty. The monthly payments are affordable and you’ll have the added benefit of peace of mind.