Extended car warranties for new and used cars
Extended warranties are available for both new and used cars. Purchasing an extended warranty will ensure that your car always gets the repairs it needs - regardless of whether you have the cash on hand to pay for them.
Purchasing a new car extended warranty makes financial sense if:
- You really desire the peace of mind that an extended warranty brings, knowing that the combination of the original warranty plus the extended warranty will cover the costs for repairs for virtually any breakdown.
- You absolutely need your car to be driveable but you cannot handle budget-busting repair bills.
Used car warranties are more essential because used cars are more likely to break down. Because repairs are needed more often, the warranty has a better chance of paying for itself. Also, once the original manufacturer's warranty is expired, your used car's extended warranty may be the only thing that stands between you and large, unexpected repair bills.
A used car extended warranty will cost more than an extended warranty for a new car. Generally speaking, the monthly payments will be lower the earlier in the life of the car that you buy the warranty.
Before committing to an extended warranty and a warranty company, take the time to explore the ins and outs of the various coverage options. You can save hundreds of dollars by comparison shopping to get the best new or used car warranty quote.
Here's a list of important questions you should consider:
Do you really need an extended car warranty?
Your vehicle is one of your biggest investments, and an extended car warranty will ensure it's repaired if anything goes wrong. Did you know that the average major repair is over $2,000? With the complexity of today's vehicles, one major repair often costs more than the extended warranty.
You are making a bet when you buy any extended car warranty. You are betting that the total amount of the warranty payments will be less than the amount you would pay when your car breaks down. Before purchasing a warranty, think critically about your particular car. Is it a make and model that will run for 150,000 miles just by changing the oil regularly? Then you might not want to pay for an extended warrantee. But if your car has a tendency to break down, or if you can't afford to make a large lump-sum repair payment, a new or used car warranty can be a great purchase.
When should I buy extended warranty coverage?
An extended car warranty is less expensive the earlier you purchase it. As your vehicle ages and accrues mileage, the price for protection rises. The newer your vehicle is, the lower the prices and the longer the terms. The warranty company usually takes into account the time left on your manufacturer's warranty, if any, and takes over after it expires.
What should I look for in the warranty's coverage?
Be sure the most expensive parts of the car are covered, namely the engine and power train.
How will my claims be handled?
Look for a company that handles all aspects of your claim -- and allows you to use the repair facility of your choice. Don't get locked in to going to their preferred provider, who may not be the best option for you.
The warranty company should pay the repair facility immediately via corporate credit card. They should cover all parts, labor and even sales tax (if applicable) with no limit on the number of claims you may have, or the parts that may be used for replacement.
Make sure that the warranty company you are considering will pay the full, posted labor rate to the repair facility and not just the hourly rate designated by the repair guides.
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