An extended car warranty provides additional coverage after a vehicle’s original factory warranty expires. These warranties may cover the cost of repairs to some or all parts of a car or truck, depending on the specific contract details. They are available from dealerships, auto clubs and insurance companies (which sometimes market them as mechanical breakdown coverage). The cost of these warranties varies, as do the terms they offer. The best time to purchase a plan may be when your car is still new, but you can also buy one after the manufacturer warranty ends and even after you’ve driven your vehicle for several years.
Before you decide to buy an extended warranty, carefully consider your finances, risk tolerance and the vehicle you’re driving. It is important to read the fine print, as these warranties typically only cover certain components and can be restrictive about where and how a repair is done. Some include a deductible, which you will need to pay toward the cost of repairs.
Some extended warranties come with extras, such as roadside assistance, towing and rental car coverage. It is also a good idea to find out how long you’ll need to wait for reimbursement if the warranty company needs to review the repair bill or determine whether a service is covered.
The decision to buy an extended warranty can be complicated when you’re trying to make a used-car purchase. You’ll want to know the car’s history, especially any problems that may have occurred in the past, and you’ll need to consider whether the car you’re purchasing will be worth the money in the long run if you’re planning on trading it in or selling it to someone else.
Many dealerships sell extended warranties as part of a car’s sale. They’re also available from third-party providers and some banks, credit unions and insurers offer them to customers as an optional product. If you choose to buy a warranty from the dealership, it can be easily rolled into your loan payment and may be transferable if you ever decide to sell the car.
An extended warranty can provide peace of mind if you’re worried about major repair bills after your car’s standard warranty runs out. However, it’s a better idea to save the money you would have spent on a warranty in an emergency fund or a separate car repair fund.
When deciding whether or not to buy an extended warranty, you should think about your budget and how much you value the vehicle you’re driving. If it’s a reliable model from a reputable brand, a warranty might be worth the added expense. But if you’re driving an older or less-reliable car, it might be better to spend the money on a vacation or a home improvement project instead. Then you’ll be able to enjoy your car without worrying about how much it will cost to fix it down the road. buy extended car warranty