Going through the process of buying another car can be exhausting enough without someone trying to push an expensive extended warranty on you. But is the extra money you have to shell out going to be worth it?
I recently had two customers who both bought extended warranties come into the shop for some major repairs.
Customer A purchased their warranty after they bought the car. The vehicle had just under 150,000 on the odometer at the time of the repair so their coverage was nearing the end. The warranty company covered the repair minus the cost of a couple wear items we suggested the customer replace while everything was apart.
Customer B purchased their warranty along with the vehicle from a private dealer. The vehicle had about 30,000 miles on the odometer at the time of the repair and was still within the factory warranty. Neither the factory nor the warranty company would cover the repair because it was deemed it to be a wear and tear item. This was explicitly stated in the terms of the warranty. So after paying for the extended warranty, and despite being under the factory warranty the customer ended up paying out of pocket for the entire repair.
Those two examples argue the point either way. Although I myself would advise against purchasing an extended warranty, if you truly feel you need one then here are some things to keep in mind.
Reliability and longevity. How reliable is the make and model you are purchasing? The warranty will naturally favor the less reliable brands. If you plan on keeping the car long after the factory warranty expires then an extended warranty would certainly be a good idea as all cars become less reliable over time.
Type of coverage. You will need to know what exactly is covered under the warranty. Most coverage options will not cover wear and tear items like brakes, batteries, clutches and maintenance items. Also make sure you understand any restrictions as well as what will cause your warranty to be voided.
Cost. Don’t feel pressured into buying a warranty straight away. You can always purchase a warranty after you have bought the car. So by all means opt out and shop around. You’ll often end up with a better deal. Just make sure you choose a coverage provider that comes recommended by others. Paying a little extra for the best coverage may even save you more down the line. Many top tier coverage options will cover towing and a rental car as well as other expenses.
Although there is no right or wrong answer as the benefits will vary from case to case. Hopefully this information gives you more confidence to make the decision that is best for you if ever need be.