Usually when we purchase a new or used vehicle from a dealership, they offer some sort of extended warranty, but do they save you money or cost you money? Let’s take a look.
Certified Used Cars:
When a used vehicle is labeled as being Certified, this means an extended warranty is placed on the vehicle before you purchase and this extended warranty comes straight from the manufacturer, thus it isn’t something you’ll be expected to pay extra for from the dealership. A Certified warranty is backed by the original manufacturer and the dealership has inspected the vehicle to be certain it meets specific standards. Keep in mind that not all used vehicles qualify to be Certified.
Extended Warranties: New Vehicles
When you purchase a new vehicle, will you be keeping it for longer than the standard factory warranty? For instance, if the standard factory warranty is 3 years or 36,000 miles whichever comes first and you’re set on keeping the vehicle for 2 or 3 years, it doesn’t make much sense to purchase an extended warranty since you wouldn’t have an opportunity to use the extended warranty, anyway. On the other hand, if you have long term plans for your vehicle and intend to keep it for as long as possible, buying an extended warranty is a very good idea.
Extended Warranties: Used Vehicles
When you’re purchasing a used vehicle and considering purchasing an extended warranty for the vehicle as well, it’s important to educate yourself and ask questions. Since these types of warranties vary greatly, you’ll want to know up front what the standard warranty from the dealership will cover on your used vehicle. Warranties of this type can range from as little as 30 days or 1000 miles (whichever comes first) to longer periods of coverage. Also ask the dealership if a portion of the original manufacturer warranty is still in effect (on some newer used vehicles, this is often the case). Either way, if you’ll be keeping the vehicle for some time to come, it’s a good idea to purchase extended warranty protection.
Extended warranties vary in coverage, so be sure you understand exactly what you’re getting. Some extended warranties will only cover serious problems, like transmissions, while others may be so great they’ll cover everything right down to the electric windows and rear defroster. It’s to your benefit to understand everything before signing and if you’re still unsure or don’t understand, don’t be afraid to ask questions. When I recently bought my used car, I asked a lot of questions about different extended warranties until I made certain I understood exactly what I would be paying for.
Extended warranties also vary in price, so be sure you know exactly what you’re paying for. Also keep in mind that purchasing an extended warranty from the dealership means extra money in their pocket, so compare prices and understand the coverage before signing on the dotted line.
The Final Decision:
Eventually, the decision to purchase an extended warranty comes down to you. Do you feel comfortable purchasing an extended warranty based on the condition of the vehicle? Once you can determine whether the cost of any potential breakdowns or repairs down the road could possibly exceed the cost of the extended warranty, you’ll know what to do. This is why it’s imperative that you find out all you can about the vehicle you’re hoping to purchase.