Do You Really Need an Extended Car Warranty?

It’s almost a rite of passage: in the moment of excitement when buying that sparkling new car you have been dreaming about for ages is when the sales rep will ask whether you’re interested in an extended car warranty package.

What do you say? They sound like a very good idea; for just a little extra cash, maybe paid in small monthly installments, you get added coverage to protect your wallet from the cost of any unexpected problems or malfunctions with your new ride.

For some, it’s a no-brainer. These people have probably decided to buy the car knowing they are interested in extended warranty coverage. They have not been waiting to complete the sale before asking for information about extended warranties to consider. They have, therefore, had more time to read about and understand fully what an extended warranty involves and what it covers.

For just a few dollars more they know they can rest assured that they will be able to enjoy more worry-free driving over an extended period of time. This sort of car buyer is pre-programmed to set up a budget with an extended warranty in mind.

Of course, for others – especially those on a tight budget – it may simply be a stretch too far. But there’s always a third group in the middle ground who are torn about the opportunity and still have some thinking to do.

If you are one of these, there are a few things to remember. So, when the sales rep presents you with the opportunity to add some extended warranty coverage, ask him or her if you can take the information home to read and understand it completely before making your decision.

There’s a good reason for this: there is no extended warranty package that doesn’t come with pages of fine print and many conditions that you need to be aware of before you can truly make an informed decision.

Don’t make an impulse decision at the salesperson’s desk. It’s highly recommended that you spend at least an hour, without distractions, reviewing the extended warranty documentation. If your salesperson pushes too hard to decide immediately, the best advice is to find another dealer.

A myriad of reasons causes car buyers to opt for extended warranties. A few of these have very little to do with any idea that a claim may be made at some point in the future. Some people like playing safe, giving themselves extra peace of mind, and/or enjoying being protected. For these folks, an extended warranty may sound like a good idea – even if they know they are unlikely ever to need its protective qualities.

Extended warranties are built on peace of mind, and some car buyers are more than willing to pay for the privilege.

If you are still unconvinced, research may change your mind. The auto publications are full of reviews highlighting common issues for specific vehicles, particularly if they have been used. There are numerous tips for car buyers, with suggested checks they are advised to make before they hand over any cash and often model-specific advice. This may give you a good idea of which models are likely to benefit from taking out some extended warranty coverage.

What is certain in the world of vehicles is they are machines that are made out of components that will eventually break, wear down, and need to be replaced or repaired. However, no warranty covers every part of a vehicle, and extended warranties are certainly not created equal.

Some things to consider about extended warranty coverage:

• Does it require you to pay upfront for repairs and then claim the money back?
• Does the package have a deductible that means you may have to pay the first few hundred dollars of any repair job?
• Does the policy cover only used or second-hand replacement parts, not brand-new ones?
• Does it allow you to make a warranty claim for the same part a second time?
• What’s not covered? Some warranties don’t cover vehicles slightly modified from factory specifications.

Be aware that an extended warranty covering consumables like brakes, tires, or clutches is rare. Also, with most add-on warranty packages and some factory warranties, the onus is on the owner to maintain the vehicle meticulously.

The gist of the matter is that what it costs to take out an extended warranty can be money well spent. But good and proper, regular and timely inspections and maintenance can help reduce your ongoing costs and extend the life of your vehicle, too.