You bought a brand new car. It is shiny, new (or it’s brand new for you) and has that wonderful new-car scent. What will happen when the factory’s warranty expires, though? Extended Auto Warranty are your possible safety net in the event of future car repairs. Let’s go through it.
A warranty that is extended for auto parts and systems is not really a warranty. It’s really more of an extended insurance policy for your car’s parts and system. Paying upfront or in installments will cover future repair costs. Doesn’t that sound simple? This story is not over yet.
Imagine that you’re driving on the highway, and your engine suddenly starts to flicker. When you imagine the looming repair bill, your heart skips beats. The sinking sensation could be lessened if you had an extended auto warranty.
This is where the fun begins, or can be tricky depending on how you view it. All warranties are not created equal. Some warranties cover major components, such as the transmission and engine. Others offer bumper-tobumper protection. Then there are the ones with so many limitations that it makes Swiss cheese look solid.
Dave is my friend. He purchased an extended warranty on his SUV believing he was covered in case of any issues. He was shocked when his air conditioner went on vacation permanently during a summer heat wave. He thought he’d be covered, but it turns out the fine print has other plans.
These warranties can come in handy if they are chosen correctly. Like dating, you want to choose a company that is compatible with your lifestyle and meets all of your requirements.
Read the fine prints! Trust me, you won’t regret it. Verify what is and is not included in the contract before signing.
Another nugget of wisdom is to consider who backs the warranty–manufacturer or third-party provider? Manufacturer-backed warranty policies are usually easier to navigate, but can cost more. Third-party options are often cheaper, but can come with additional bureaucracy in filing claims.
It’s also important to consider how long your vehicle will be with you. If you change cars more quickly than Taylor Swift changes her boyfriends, it’s best to avoid the process altogether.
Extended warranties may include benefits such as roadside assistance or rental vehicle reimbursement. This sounds great, but it’s possible that these perks are already included in other services you pay for like AAA or some credit cards.
We’ll talk money now, because wallets really do matter. The cost of insurance can vary greatly depending on factors such as the make and model of your car, or how much coverage you want (remember Dave?) Some dealers will negotiate to lower the price. Just like a fleamarket, they are usually willing to haggle.
Shortly (pun intended), extended car warranties can give you peace of mind. However, they are not necessary for every vehicle type or for everyone.
The next time you hear someone pitch an extended auto warranty to you, don’t forget these nuggets. If you do your research, it will be worth its weight in money. But if not, then you’ll just end up paying for something that isn’t necessary.
Here’s what I think. Now drive safely…and your engines will purr forever!