Nowadays, a car is more of a necessity than a luxury. You need a reliable vehicle to take you to work, run errands, and travel across the country. In fact, reliability is one of the most significant considerations that car buyers have on their minds before purchasing a vehicle. Well, who doesn’t want reliability if you’re paying a pretty penny for a car?
But, here’s the thing.
No vehicle is 100% reliable. Cars are machines that are very much susceptible to wear and tear after years of use.
Factory Warranty vs. Extended Warranty
To ensure the buyer’s safety and peace of mind, manufacturers include a factory warranty for brand new vehicles. This type of contract offers bumper-to-bumper coverage for a given period and specified mileage—typically around three years and 36,000 miles. This means factory-related issues will be covered by the warranty should they arise within the specified period.
While factory warranties may provide excellent benefits for buyers, they can also be limited in coverage compared to extended warranties. Manufacturer warranties often do not cover accidents, maintenance, roadside assistance, and even oil changes. If you want greater peace of mind while you’re on the road, consider buying an extended auto warranty.
An extended auto warranty or vehicle service contract is a type of service coverage you can purchase for your vehicle, with or without an existing factory warranty. You can buy an extended warranty from your automaker or a third-party provider.
Do note that extended warranties from car manufacturers may only offer a literal extension on the current coverage period that your vehicle has. In contrast, third-party providers issue more coverage and benefits, like roadside and emergency assistance.
If you’re sold on the idea of securing an extended warranty for your car, here are some things to consider before buying one:
- Customization Of Coverage
Third-party extended warranty providers offer a more comprehensive range of coverage options as opposed to manufacturer warranties. Third-party providers offer customizable plans depending on you and your car’s needs.
For example, repairs for cars with technology systems installed may cost more when those systems fail. If you’re someone who needs these systems fixed right away, you may benefit from having an extended warranty on your car. At the same time, if you’re buying a used vehicle, third-party providers can also help you choose the best coverage option. This could include routine maintenance checks.
- Cheaper In The Long Run
Extended warranties can protect your pockets as well. When a car begins to show issues, it could be expensive to diagnose, isolate, and repair damages from time to time. For example, fixing or replacing the radiator in your car may cost around USD $400-$900. And in case they find more problems in your vehicle, that price could easily bump up to 4 digits. But if you have an extended warranty, you’d only have to pay a small deductible that could range from 0$ to $100.
- Additional Expense
You do get many benefits with an extended auto warranty, but it comes with a price tag. Just like an insurance policy, you pay a certain amount to cover your car’s warranty. This payment is used if you need to get your vehicle repaired.
The downside to that is you’re adding a few hundred to a thousand dollars into your monthly or annual expenses. So before shopping for an extended warranty, ask yourself how much you are willing to pay in exchange for your peace of mind.
- You May Never Use It
A vehicle service contract is like a life insurance policy; if you don’t use it, you lose it. When it comes to buying an extended auto warranty, understand that you are paying for the off chance that your car would need repairing sometime in the future. And if that never happens within the coverage period, then your money is gone. This is why an extended auto warranty is best recommended for people who bought secondhand or used cars, as these are most likely going to require more repairs and maintenance.
Getting an extended auto warranty for your car can provide many benefits like bumper-to-bumper coverage, maintenance, accident coverage, roadside, and emergency assistance, as well as other component issues such as oil change. However, it’s not often the best option for those who are cutting costs and those who can pay for a mechanic in hard cash. If you are not keen on getting an extended auto warranty, you may opt to build an emergency fund for your car instead.