When you’re shopping for a new car, you’ll likely be offered the chance to buy an extended warranty on your vehicle. The cost of these warranties can be significant, but they can also save you a lot of money in the long run if your car needs major repairs. It’s important to understand what extended warranties cover before you decide if this type of coverage is right for you.
Most extended warranties offer a broad range of parts and systems that cover mechanical failures for an agreed-upon length of time. These plans typically include powertrain protection, bumper-to-bumper coverage and additional perks such as trip interruption towing and rental car reimbursement. However, most of these plans exclude wear items and routine maintenance, so you should always read the fine print.
Many third-party providers now offer a variety of extended warranty plans. These can be purchased either up front or rolled into the financing of your vehicle, and competition is driving contract costs down. Some dealers also offer their own versions of these plans. However, these warranties often come with a larger upfront payment and deductible than their third-party counterparts. It’s best to compare prices and terms before you decide whether an extended warranty is worth it for your situation.
One of the most common reasons for buying an extended warranty is to protect yourself from the financial burden of a catastrophic repair bill. However, new cars are more reliable than ever before, and you might be able to save the money that would have gone toward an extended warranty by simply setting aside money in your savings account to cover the cost of potential future repairs.
In addition, most extended warranties have a minimum term and mileage requirement, and you should be prepared to pay the deductible for any repair work performed before the plan kicks in. You should also consider how much you’ve already spent on out-of-warranty repairs on your current vehicle and factor that into your decision.
Some F&I managers can make you feel like you’re taking a risk by saying no to an extended warranty, but you should always shop around for the best price and coverage before agreeing to it. The best time to do this is before you negotiate your purchase, but you can still research and find the right plan after the sale.
It’s also important to remember that most warranties have a 30-day and 1,000-mile waiting period, which means you’ll be paying for the peace of mind without any immediate protection if something goes wrong. This should be a major consideration in your decision, as it could cost you more than the car is worth in the short term.
If you do decide to get an extended warranty, it’s a good idea to keep a detailed record of all repairs and maintenance you perform on your vehicle. This will help if you need to file a claim or prove the validity of the warranty, and it can also be helpful when you’re ready to sell the vehicle. extended warranty on new car