A car extended warranty provides an added layer of protection beyond a vehicle’s standard factory warranty. It covers specific out-of-pocket maintenance items and potentially expensive repair costs that may occur over long-term ownership. Many dealerships, auto clubs and third-party companies sell these warranties. They vary in length, what they cover and price. It is important to read the fine print before signing up for any of these warranties.
It is also important to ask questions when shopping for an extended warranty. Some of the more common ones include: Does this warranty have a deductible? If so, what is it? Will this deductible reduce my coverage? The answer to these questions will help you decide if this is the right option for you.
Another question to consider is whether the warranty is transferable should you decide to sell your car. A warranty that is not transferable can be a waste of money. It is best to look for a policy that will transfer to the next owner or that can be transferred to any certified repair shop that accepts the brand of the vehicle.
You should also check to see if the warranty is cancellable at a later date. If you are able to cancel it, you should receive a prorated refund. This is particularly important if you purchased the warranty when you bought your car and it was rolled into your loan or credit card.
A final point to consider is that most extended warranties do not cover scheduled maintenance items, such as oil changes, timing belt replacements or tune-ups. It is important to take your car in for these services at the appropriate intervals, even if you have an extended warranty. Doing this will minimize the likelihood of the warranty being invalidated due to lack of proper maintenance.
An extended warranty may be worth it if you are concerned about the cost of major repairs or you have limited savings for unexpected expenses. However, it is best to weigh these costs against the price of the warranty before purchasing.
It is also a good idea to purchase an extended warranty while your car is still under the original factory warranty. This will help keep the prices down and the coverage options more expansive. It is also a good idea to get the warranty from the manufacturer, as they will have better negotiating power with dealerships and third-party providers.
An additional reason to purchase an extended warranty is that it can increase the resale value of your car. Buyers will be more willing to purchase your used vehicle if it has an extended warranty in place. This is because it shows that you took care of your vehicle and kept it in good condition. It can also make the vehicle more appealing to people on a tight budget, as it will not be so expensive.