Should You Buy an Extended Warranty for Your Car
Shopping for a new car can be a very exciting, exhilarating experience, and it’s not always easy to remain patient when you’re in the homestretch of the car-buying process and waiting for the salesperson to hand over the keys to your new ride! Once you’ve found the vehicle you want to purchase and it’s time to make it official, it’s not uncommon to want to rush through the paper-signing process and get straight to the fun part- driving off the lot and taking that sweet victory lap around the neighborhood on your new set of wheels!
But before the new-car ritual of taking joyrides and proudly showing off your vehicle to friends begins, you have to get through the all-important meeting with the Finance Guy. You know the one- the guy who sits in that little office in the dealership and tries to sell you on a bunch of upgrades and premium packages before you get down to the nitty-gritty of signing your finance paperwork. While it may be tempting to decline all of Finance Guy’s add-ons and hurry through the process to make the care all yours, there is one additional purchase you may really want to consider, and that is the extended car warranty.
What’s an Extended Car Warranty?
When you buy or lease a new vehicle from the dealership, you are offered an extended car warranty. This warranty goes beyond the standard manufacturer’s warranty that comes with the purchase of your vehicle to provide coverage for parts and repairs long after the 36,000-mile mark, which is when most standard warranties expire (and, maybe not coincidentally, when a number of car parts begin to give out!)
Purchasing an extended car warranty at the time of buying your car can effectively protect you against having to pay out of pocket for the potentially costly repairs that can begin to crop up even in new cars. Repairs and replacements of parts large and small will be covered for a considerably longer time than they would have been under the standard warranty, giving you the reassurance that you will be able to handily afford an unexpected auto repair.
Most used car buyers search for “extended auto warranties”. But extended auto warranties are actually either Mechanical Breakdown Insurance (in California) or a Vehicle Service contract (in the rest of the USA). When looking at extended auto warranties, be sure to check out Olive, as they can get a quote in just a few minutes, in most cases. They also have a monthly option that you can cancel any time.
Benefits of an Extended Car Warranty
Let’s put it this way- Future You will thank Past You for opting into extended warranty coverage every time you find yourself in a situation where a repair or part replacement is necessary for your vehicle. Car repairs- even minor ones- can add up fast, and it’s not uncommon for people to have to find alternate means of transportation or even take out a loan because they can’t afford to come out of pocket for the necessary repairs to their vehicle. The main benefit of the extended car warranty is the peace of mind that your car can be repaired at no additional cost to you, in most cases.
Disadvantages of Extended Car Warranties
So if extended car warranties are so great, why doesn’t everyone just buy them? Good question- for many people who decide not to purchase the extended warranty, it comes down to the additional up-front cost tacked onto the purchase price of their vehicle. When you’re in car-buying mode, you are on a mission to get the best deal possible and see how far below sticker price you can pay. By the time you’re in that room with Finance Guy, you’re not looking to add another penny onto the purchase price you just worked so hard to negotiate. However, over time, the cost of the extended warranty can certainly pay for itself- just one transmission repair can cost upwards of $1,500, so you can see how quick of a return you could get on your investment!
Another potential disadvantage of purchasing an extended car warranty from the dealer is that you then must bring your car to a certified repair shop any time you are in need of a repair or part replacement. This can be inconvenient for someone who doesn’t live close to a certified shop, or for someone who already has a preferred mechanic where they like to take their cars to be fixed.
It is a common misconception that an extended car warranty can only be purchased from a dealership, and only for new vehicle purchases. People who are purchasing pre-owned cars are actually also eligible for the additional coverage. Since a number of people prefer to purchase used cars, this could be why not everyone invests in an extended car warranty!
Fortunately, there is good news: while a traditional extended warranty from a dealership may not always be the right fit, some insurance companies offer mechanical breakdown coverage, which acts as an extended car warranty while offering some flexibility, such as affordable monthly payments with the option to cancel anytime, as well as the ability to choose any mechanic you wish for your car repairs. Some mechanical breakdown policies are even able to be purchased by people who have bought used cars!
An extended car warranty may be just the thing you need if you want the peace of mind that you’ll never be strapped for cash due to an unforeseen car repair. Take time to consider an extended car warranty next time you’re in the market to buy or lease a car.