Most of us have been burned by the costs of hefty auto repairs, many of which aren’t our fault. There’s always the hesitancy of trusting in the reliability of a new car, regardless of the state of the vehicle. If you’ve purchased a car from a dealership, you’re accustomed to the moment the salesperson inevitably pitches you an extended warranty. Despite the price, there’s often a fair amount of consideration that goes into your decision. In this blog, we’ll discuss the pros and cons of an extended warranty for your car to help simplify your decision.
What Does an Extended Car Warranty Cover?
It’s easiest to think of an extended warranty as a lengthened service contract that covers vehicle repairs once the manufacturer’s warranty expires. It works similar to auto insurance in some respects in that there’s usually a deductible that must be met before repairing the vehicle. What the warranty covers varies depending on the company, but it’s easier to think in terms of what they don’t cover:
- Routine Maintenance: Sometimes, dealerships will offer car maintenance as a perk for expensive plans, but oil changes, tire rotation, and roadside assistance aren’t typically covered by a warranty.
- Wear-and-Tear: Warranties don’t cover normal wear-and-tear that results from use of the vehicle, such as worn brake pads, clutches, and windshield wipers.
- Exterior and Interior Damage: Extended warranties won’t cover damages to the body panel resulting from an accident, nor will they cover interior damage, such as a cracked dashboard.
In general, it’s best practice to read the manufacturer’s and dealership’s warranty, as they may have different levels of coverage. For the most part, the purpose of extended warranties is to protect you should some unpredictable damage occur unexpectedly, such as a blown gasket.
What are the Benefits and Drawbacks of Extended Warranties?
Depending on your vehicle’s specifications and coverage level, an extended warranty can cost you several hundred to over a thousand dollars per year, so it’s important to take into careful consideration this investment. The best way to do so is to weigh the pros and cons.
Pros of Having an Extended Warranty
Beyond extending the warranty after the manufacturer’s has expired, an extended warranty can offer peace of mind. Should your vehicle experience unexpected damage – such as an engine or transmission malfunction – the warranty could potentially save you money. This is especially true for those who ride their vehicles into the ground.
Cons of Having an Extended Warranty
Extended warranties are usually expensive, and beyond that, a deductible may apply to certain damages according to the contract. Also, not only do they have restrictions on what is covered, but they may also take depreciation into account, altering the terms of the warranty, including cost and coverage.
Is Purchasing an Extended Warranty for My Car Worth It?
As with most decisions, buying an extended warranty depends on your circumstances. If you’re one to drive a car until the steering wheel falls off, an extended warranty may be worthwhile – albeit, after factoring in the effect of depreciation on the contract. However, most cars usually don’t require any repairs beyond the usual maintenance within the first few years, and if you tend to trade in vehicles every few years, the investment isn’t worth it. Oftentimes, the best decision financially is to gradually put money aside to deal with unexpected repairs.
There are several factors you must consider when determining whether to purchase an extended warranty for your car. However, one thing you don’t need to consider as a car owner is whether to purchase auto insurance. While a warranty may cover unpreventable damages to your car, auto insurance will protect you and those around you in the event of an accident. TJ Woods Insurance has decades of experience pairing their clients with the right auto insurance. If you’re looking for insurance that suits your needs, contact us today.
