What’s the Deal with Extended Car Warranties?

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When you get auto financing from an Atlanta dealer, you should expect to be offered extended warranty. Extended warranty is simply an extended service contract that pays for repairs after the expiration of the vehicle’s original warranty. If you purchase such contract, it can be rolled into your loan cost. Considering that it is an added expense, should you get it? Is it something worth spending money on? Read on to figure out what the deal is with extended car warranties.

 

Extended Warranty – Is it a Need or Not?

Extended car warranties are like insurance: you pay upfront in order not to pay money in the future should you need the services. It sounds like a good idea, but is it something you need? Many experts consider this as unnecessary. New vehicles come with 3-year or 36,000-mile bumper-to-bumper warranty. Even certified used vehicles also have protection. With this protection in place, an extended warranty may not be needed. After all, extended warranties have limited coverage and often don’t include auto parts that would most likely need repairs or replacement.

However, whether or not an extended warranty is a need will depend on your own situation. One major thing to consider is the reliability of the vehicle. If your car has a track record of reliability and longevity, chances are you wouldn’t need the additional warranty.

Another consideration is how long you intend to keep the car. If you are the type of person who changes cars frequently, one who keeps a vehicle for three or four years, this additional warranty is unnecessary because the original warranty still has you covered for the period of time the vehicle is in your possession. On the contrary, if you plan to keep your vehicle for a long time, you may need the extended service plan.

If you intend to keep the car long after the original warranty has expired, ask yourself a couple of questions before you do get an extended warranty. Consider how long you plan to drive the car after the original warranty has expired, whether or not you have room in your budget for surprise expenses, and if you prefer to pay for repairs from your own pocket when you need them, among others.

 

Where to Get the Extended Warranty From?

If you decided that you need extended warranty, the next thing you have to figure out is where to get the extended warranty from. The first provider that should come to mind are auto dealers, since they are the ones that brought the warranty to your attention. It is convenient to get the extended warranty from them, but expect to pay a lot since dealers mark up the prices to earn profit. Know that the price of the same warranty can vary from one dealer to the next.

Dealers make it seem like they are the only provider of extended warranties, but in reality you have two other options: the manufacturer and independent providers. With an extended warranty from the manufacturer, you may pay more upfront compared to what the dealer charges, but you benefit from having a larger repair network. In the case of independent providers, they offer the lowest cost of all your options, but repair shop coverage may not be as they say it is. There are many independent extended warranty providers here in Atlanta, and you should choose carefully. Some offer crummy warranties, and you wouldn’t want to waste money on that.

Under no circumstance should you be pressured into buying extended warranty. An extended service plan is something you shouldn’t buy on impulse. You have a lot of choices, so you should take time to shop around and sort out all the details—what is or isn’t covered, what the deductibles are, where you can have the car repaired, etc.

 

Last Note to Car Buyers

An extended warranty is cheaper to buy when the vehicle’s original warranty is still in effect. The earlier you buy the extended service plan, the lower your rate will be. If you purchase the extended warranty after the bumper-to-bumper protection expires, expect to pay a lot more.

You need not get too excited about getting an extended warranty, though. You must know that the extended warranty doesn’t take effect after the original warranty expires; rather, it takes effect the day you purchase it. If you buy it when the car is still covered by the original warranty, you will have double protection which you will not need for a few more years.

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