Extended car warranties may have gotten a bad rap due to spam phone calls in recent years, but that doesn’t mean the product is bad on its own. On the contrary, many automobile owners would benefit greatly from a properly purchased extended warranty allowing them extra peace of mind driving their new ride. Here are six things to consider when deciding whether an extended warranty fits your lifestyle.
1. Do You Need One at All?
The most important thing to consider about the warranty that came with your car is that manufacturer knows exactly when to end it. On average, it’s likely your manufacturer’s warranty will end soon before you start having some problems that need fixing.
With that in mind, if you use your vehicle more than most, such as with a long commute or otherwise extra travelling, an extended warranty can help ensure any problems that do come up will be within the coverage period and save you a bundle. If you live in an area where extreme weather is common, such as near the ocean or in areas with heavy snow, the same can apply.
2. What’s Covered?
Some plans will cover more parts and failures than others. Check carefully to see if it’s worth spending extra money for a more comprehensive plan; often even basic plans will cover the vast majority of problems you would expect to see in your car.
3. How Long is the Coverage?
Extended warranties can be purchased in different terms, usually from a minimum of two years up to seven years. Consider how long you intend on keeping your car when deciding how long of an extension to purchase.
4. Is It Transferrable If I Sell My Car?
Even if you do sell your car before the warranty period is over, some plans are actually transferrable with the car and will apply to the new owner as well. You may be subject to a small transfer fee of about $50 or so, but a transferrable extended warranty can increase the sell value of your car by a healthy margin as well. If selling before the warranty expires is a reasonable possibility, seek out transferability in your coverage.
5. What’s the Reputation of the Seller?
The best sellers of extended warranties tend to be those who will want your business in the future. You will usually want to avoid those who sell only extended warranties and whom you’ve never dealt with before. Your bank may offer extended auto warranties directly as one option you may not realize. The dealership you purchased your car at is also incentivized to sell you an extended warranty you’re happy with so you’re return later for another automobile purchase.
6. Are There Other Perks Included?
Many extended warranty plans will include benefits ancillary to your car’s repairs. Some common examples are paid-for rental cars while your own is being repaired, 24 hour roadside assistance for smaller problems, and reimbursement for interrupted trips. Consider which benefits might be useful to you and look for them in your plan’s coverage.