Extended warranties are normally pitched as extra security for car buyers, reducing the risk of expensive repairs that might not be covered by the factory warranty. Thinking of getting one for your car? Or is your dealer convincing you really hard to get one. Should you? Some say that you do need it, especially in cases of breakdowns. Others say that you’ll never need the coverage. So what is it?
When your car breaks down, the experience is nothing but stressful. With extended warranties, however, at least you won’t have to spend a fortune to fix the broken piece or pieces. Therefore, an extended car warranty is effectively an insurance policy. Your decision on whether or not to get one depends partly on how you use your car and how you value it.
Let’s say that you do value your car vary much and decide to get an extended warranty. What would other factors be in helping you deciding? The lifespan of your car’s parts is a major element. If you know each piece’s estimated lifespan, then you can make a calculated decision about whether it’s worth getting extra coverage.
Having said that, you must first and foremost check which parts your prospective warranty will cover. If it covers those parts that are most likely to fail, then it’s a good deal. Most packages will cover major mechanical components while wear and tear parts are commonly excluded. Do read the terms and conditions though because many dispute cases involve not being able to read and review the warranty documentation to understand the coverage.
For those who are non-advocates of the extended warranty, here are the reasons. They say that among all those who bought extra coverage, more than half were unable to use it for repairs during the lifetime of the policy. Those who did use it spent hundreds more for the coverage than they saved in repair costs. Those who needed the warranties bought cars from non-reliable dealers (we’ll discuss that soon!). And, in addition to not being able to use the added coverage you bought, the money you’ll save in repairs won’t come close to what you paid for the added warranty, they say.
So, have you decided to get extended warranty for your car or not? Do tell us how it goes!