An extended auto warranty is a service contract that offers protection beyond the standard manufacturer’s warranty. These contracts are purchased from either the car dealership or an independent, third party company.
They cover repairs for a designated period of time, and can range in length from one year to several years. Most extended warranties also have a deductible, which is the amount you must pay out of pocket for repairs before the warranty coverage kicks in.
Extended auto warranties can often come with other benefits such as roadside assistance and rental car reimbursement. While an extended auto warranty can provide peace of mind, they are not necessarily for every car owner, and you can check out Endurance Warranty for more information on warranties and their cost.
If you’re considering purchasing an extended car warranty, here are six financial tips to keep in mind:
1. Determine If You Need an Extended Car Warranty
As your car ages, it becomes more likely that something will go wrong with it. Whether it’s a small problem like a loose wire or a major issue like a blown engine, repairs can be expensive. Many people choose to invest in an extended auto warranty to avoid these unexpected expenses. But how do you know if you need one?
There are a few things to consider when making your decision:
How Long Do You Plan to Keep Your Car?
If you’re planning on selling it in the near future, an extended warranty may not be necessary. However, if you plan on keeping your car for several years, an extended warranty can give you peace of mind in knowing that repairs will be covered.
Think about Your Budget
An extended warranty will add to the overall cost of owning your car. But if you can afford the monthly premiums, an extended warranty can save you money in the long run by covering unexpected repairs.
If you’re still not sure if an extended car warranty is right for you, talk to your dealer or mechanic. They can help you weigh the pros and cons and make a decision that’s best for you and your vehicle.
Consider Your Vehicle’s Age, Mileage, and Repair History
If your car is still relatively new and has been mechanically sound so far, you probably don’t need an extended warranty. However, if your car is a few years old and has needed several repairs, an extended warranty could save you money in the long run.
2. Do Your Researche
If you are looking into purchasing an extended auto warranty, it can be complicated to decide which coverage you need and which company is the best.To help you make an informed choice, it’s important to do your research.
Talk To Your Dealer or Car Manufacturer
They may offer an extended warranty that is specific to your make and model of vehicle. If not, they may be able to recommend a reputable provider.
Read Fine Print
Once you’ve narrowed down your options, take the time to read the fine print and understand the terms, coverage and deductibles that come with each plan. Pay special attention to coverage levels, exclusions, and the claims process since these will directly affect your experience.
Get Multiple Quotes
It’s always a good idea to get quotes from multiple providers before making a decision. By taking the time to do your research, you can be confident that you’re choosing the best extended car warranty for your needs.
3. Pay Attention to Exclusions
This point is so important that we are going to say it twice. Many extended warranties exclude coverage for certain parts of the car, such as the stereo system or navigation system. And some plans only cover specific types of repairs, such as engine repairs or transmission repairs.
Common exclusions include normal wear and tear items like tires and brake pads, routine maintenance such as oil changes and tune-ups, and preexisting conditions.
As a result, it’s important to read the fine print on any extended warranty before you purchase it. You may think you’re getting coverage for your needs and then find out later that your plan has exclusions that don’t cover your repair needs.
By knowing the exclusions before you purchase an extended warranty, you can be prepared ahead of time should something go wrong.
4. Consider Your Driving Habits
Whether or not an extended warranty makes sense for you depends on a number of factors, including your driving habits. If you only put a few thousand miles on your car each year, you’re less likely to experience a mechanical issue that would require coverage than someone who drives their car regularly for long distances.
If you’re the type of person who generally takes good care of your car and doesn’t neglect routine maintenance, you may not need the peace of mind an extended warranty offers.
However, if you often drive in harsh conditions or tend to keep your car for a long time, an extended warranty could save you money in the long run.
5. Get Quotes from Multiple Providers
As with anything else relating to your finances, it’s important to get quotes from multiple providers when shopping for an extended car warranty.
This will help you to compare prices and coverage, and ensure that you’re getting the best possible deal. Keep in mind that some extended warranties only cover certain parts of your car, while others will cover the entire vehicle. Be sure to read the fine print so that you know that you are comparing the same terms when comparing quotes.
Sometimes, you may get a cheaper quote, but the coverage is much less extensive than the more expensive quotes. By researching, you can ensure that you’re actually getting a good deal and not getting smoothly talked into a scammy warranty.
6. Use Your Warranty Wisely
If you do decide to purchase an extended car warranty, be sure to use it wisely.
Keep Up with Routine Maintenance
Most extended warranties require customers to perform routine maintenance in order to keep the coverage valid. So if you wait until your original manufacturer’s warranty is about to expire to start making repairs, you could void your coverage.
The same goes for aftermarket warranties.
Most of these policies have a clause that requires customers to keep up with routine maintenance in order to maintain their coverage. So if you’re planning on using your extended warranty, be sure to stay on top of all the required service appointments.
When to Pay Cash and When to Make A Claim
Likewise, don’t make small claims for things that could easily be paid out-of-pocket. This will likely increase your premiums going forward and cost you more money in the long run.
An extended car warranty can be a great way to protect yourself financially against expensive mechanical repairs or replacements down the road.
However, there are a few things you should keep in mind before making this purchase. Be sure to do your research, pay attention to exclusions, consider your driving habits, and get quotes from multiple providers before deciding on an extended car warranty plan that’s right for you.
