If you're considering an extended car warranty, you might wonder if it's worth the extra expense. It's a common thought among car owners, and for a good reason. Extended warranties provide peace of mind and protection from unexpected repair costs, but they can also be costly and have limitations. So, to help you decide if an extended warranty is worth it, here's what you need to know.
WHAT IS AN EXTENDED WARRANTY?
An extended car warranty is an extra service contract you can purchase to help cover the cost of certain repairs or replacements for your vehicle beyond the original factory warranty period. Third-party providers usually sell these warranties and can offer coverage for various mechanical and electrical problems, including engine and air conditioning problems.
When buying an extended car warranty, the vehicle owner typically pays a premium upfront or in installments over time. In return, the provider will help cover the cost of repairs or replacements for covered components of your vehicle. This can help give you peace of mind and protect you from unexpected repair bills that could be expensive.
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WHAT AN EXTENDED WARRANTY PLAN DOES (AND DOESN’T) COVER
An extended car warranty can cover the cost of certain repairs to your vehicle after the manufacturer's warranty expires. For example, a bumper-to-bumper plan typically includes coverage for:
- Major vehicle components, like the engine or transmission.
- Electrical systems, like the door locks or sunroof.
- Air conditioning and heating systems.
- Safety features, like airbags or seat belts.
- High-tech systems, like GPS.
- Hybrid vehicle parts and batteries.
But remember, this plan may not cover regular maintenance or wear-and-tear items like brakes or tires. The specific coverage and exclusions can vary depending on the plan you choose.
IS AN EXTENDED CAR WARRANTY WORTH IT?
So, is it worth it? Well, it depends.
For example, let's say you plan to hold onto a car for an extended period and take excellent care of it. In this case, an extended warranty might be a wise purchase, even more so if you don’t have mechanical skills or a solid relationship with an auto shop that can help you in a pinch.
Keep in mind, if you decide to buy an extended warranty, researching and ensuring you're working with a trustworthy company is essential. The Federal Trade Commission suggests checking their data against your state's consumer protection office to ensure they're reputable.
Consider skipping the extended car warranty if the factory warranty still covers your car and you follow the maintenance schedule, mainly if it's a few years old. But, if you have a used car in good condition or the manufacturer's warranty has expired, an extended warranty might be worth it. Either way, always read the details and ask questions before signing up.
Check to see if your car is still under factory warranty here.
