Ask any ten people if an extended car warranty is worth it and you’ll get ten different answers, but most fall into two categories. Some people think the peace of mind is absolutely worth it while others view it as a scam, helping the dealer make more of as profit.
So, what’s the right answer? As it turns out, deciding to pick up this coverage depends on your personal preference and your situation. There are wide variety of factors to consider before signing your signature. Here’s how to tell if you really need an extended car warranty.
Length of Ownership
Since this is extended coverage, the first aspect to consider is how long you plan on keeping the car. When you’re buying a new car, it already comes with a manufacturer warranty that typically covers the car for three years if not longer.
If you don’t plan on keeping your car for that length of time, then there’s no reason to pick up an extended warranty. If you’re going to have it for five to six years, then you might want to consider this form of coverage to help pay for repairs.
Does the Car Come with One?
After the initial bumper-to-bumper warranty expires, most cars have a powertrain warranty that activates. Chevy, for instance, has powertrain coverage that last for five years or 60,000 miles, whichever comes first.
Keep in mind that the powertrain only covers the parts that make the car move. Windows, door handles, mirrors, and electronics are outside of this coverage. You would need legal aid, like this Sacramento car accident attorney, to cover the cost of anything damaged in a wreck outside of the powertrain.
Purchasing Now vs. Later
The benefit of purchasing an extended warranty at signing is that you can roll the cost into your monthly car payments. For many, that options is simply the easier choice. However, you’re paying the cost of the warranty now with interest included even though it won’t kick in for three years.
Choosing to buy after your initial three-year warranty expires allows you to decide if you like the car and know how troublesome it might be. Plus, you can shop around for extended warranties to find the best price. If you do decide to purchase extended coverage, it’s often better to wait.
Warranty Cost vs. Cost of Repairs
Dealers will always pitch the extended warranty using worst case scenarios, like the electronic system failing or your transmission falling out. These instances are rare, but a simple $600 repair isn’t, as any lemon law attorney would say. What you really need to decide is you’ll spend more on repairs in the first five years then you would on the warranty.
That’s impossible to tell, of course. If the extended warranty was $3,000 but your repairs in the first five years cost $1,500, you would have saved money by not buying the warranty. Make sure you fully understand what’s covered, as well. An accident requiring the aid of an attorney typically isn’t covered, for instance.
Do I Need an Extended Warranty?
Ultimately, you have to weigh the pros and cons for yourself. Consider how much you’ll be driving the car, how long you plan on keeping it, and what the cost of repairs might look like in relation to the cost of the coverage. Also, it always pays off to pick up extended coverage down the road.