Buying a car is no small purchase for most of us, and when we find the car of our dreams at the price we can afford, it is an exciting feeling. So much thought goes into which vehicles you like that fit your lifestyle or how you’re going to finance the payments, that you might not even weigh your options in considering an extended warranty option, or service contract. When the car salesman you’re working with asks if you would like to sign up for the extended warranty, it’s a great idea to be knowledgeable in what exactly it is, the pros and cons, and how
What is an extended warranty?
An extended warranty is an additional expense you can opt into once you purchase the vehicle that gives you an extra layer of protection when it comes to getting work done on your new car. Every brand new vehicle that rolls off of the lot is covered by a manufacturer’s warranty up until a set number of miles are driven on the car or a set amount of time has passed since the car was purchased. The extended warranty covers specific repairs that would otherwise be covered by the warranty, but it wouldn’t kick in until after the manufacturer’s warranty expires.
There are all kinds of different extended warranties, some with deductibles and some without. Fortunately, you don’t need to make the decision to purchase an extended warranty at the time of purchase and can be added at any point while the car is still until the manufacturer’s warranty, but once it expires, it’ll be more expensive to add on.
When it makes sense to get an extended warranty
Are you planning on keeping your car for the long haul? If you’re planning on keeping this car until it basically ceases to run, it’s a great idea to get an extended warranty. If you go through the car dealership you purchased your car from, you can make payments on this service plan with your monthly car loan payments, making it easier for you to have everything rolled into one.
On the other hand, if you buy a new car every two years, it doesn’t make a lot of sense to pay for an extended warranty you will likely never need to use anyway. Making the decision on whether or not to sign up for it really depends on how long you plan to keep the car and your own financial circumstance.
If you do decide that you want to get an extended warranty, make sure you know exactly what would be covered and what wouldn’t be covered. Parts that are used often and have a tendency to wear down quickly, like the transmission, power steering, and electrical components. While not everyone likes to sign up for the extended warranty option, it does give the buyer peace of mind.