Should I Buy An Extended Warranty On A Used Car?
When making the big investment of buying a new or used car reliability is always a huge concern. When buying a used car and considering the manufacturers warranty has expired, this can become stressful. This Creates the question of should I buy an extended warranty on a used car?
Car buyers are almost always offered an extended warranty. Either offered at the time of sale or even a month later by mail, email or even by phone. Lots of times these later warranty offers are by some third party warranty provider.
What Is an Extended Warranty?
A Extended Warranty is most of the time actually a Service Contract. This is an agreement to pay for repairs to the vehicle for a set amount of time. The agreement will generally vary on what is all covered depending on the type of coverage you choose to purchase.
Most extended warranty plans include roadside assistance of some sort. Also a lot of plans include rental car allowance incase your vehicle repair is going to leave you with out a car for any period of time.
This contract does not cover for the period of which the vehicle is under the factory warranty. The factory warranty will generally cover the vehicle for up to 3 years or 36,000 miles which ever comes first. This is the Bumper to Bumper or Basic Warranty. The powertrain warranty will usually cover the engine block, transmission casing and all internal components for a longer period of time. This on domestic vehicles is usually 5 years and 60,000 miles.
Which Brand Of Extended Warranty Should I Buy?
As you may already know, there are plenty of different warranties out there. We know from research and experience that the Manufacturer Backed Warranties are usually the best choice. We’re not saying that some of the third party warranties aren’t good, It’s just our experience that the manufacturer warranty is usually less hassle for the customer.
Most manufacturer backed warranties log their warranties in there main system just like your original factory warranty. This means when you pull into any of the like franchise dealerships they can look your warranty up for you. They’re all familiar with the repair claim process because they use it daily.
Third party warranties usually require you carry paperwork with you and present to the dealer when you arrive. At this point it’s the dealerships responsibility to call in the claim by phone vs their streamlined factory process. Then they have to wait for an approval and credit card number to pay for the repair.This all translates into time and hassle for the customer.
This all said, there are some popular third-party plans out there that are pretty well known with lots of dealerships. The fact is, with a little shopping around, you can usually find the Factory Backed Extended Warranty at a better price.
Do I Need An Extended Warranty?
To determine whether you need an extended warranty or not, you will just need to be really honest with yourself. First and foremost is your budget. Will a $2,000, $3,000 or even higher service bill bust your budget? This is a yes for about 90% of all car owners. It is just a fact not anything for anyone to be ashamed of, the price of service repairs have skyrocketed over the last decade.
The next question is, are you a worrier? If you are, then chances are you will know what day and mileage the factory warranty will or did run out. Most likely you will continue to worry about this for the days to come. If you are able to answer both of these questions with a Honest No. Then you probably don’t need a warranty. If you answered Yes to either of them, then you should start shopping.
Does A Extended Warranty Help The Resale Value Of My Used Car?
This question has a lot of different answers. In my experience, you can buy an extended warranty on a used vehicle a lot easier and cheaper when it is newer rather than older. A lower mileage makes it cheaper as well. So you can buy a longer warranty that may be still in effect when you reach the point of selling or trading the vehicle. Which will add to the resale value of your used car. This usually assures the next owner that this is a car that was regularly maintained.
Where Should I Buy My Extended Warranty?
The first place you are generally offered an extended warranty is at the car dealer if you buy your car from a dealer. Although I recommend the factory backed warranty the fact is the dealer usually heavily inflates the extended warranty price. Also they may be offering a third party warranty for larger profit margins. If you choose to shop direct there are usually reduced pricing available.
