Should I Buy Extended Warranty on New Car?
An extended warranty is a service contract that covers the cost of specified repairs on your vehicle after the manufacturer’s warranty expires. The warranties vary in price and coverage, and some are offered by third parties while others are backed by the car manufacturers themselves. Some automakers offer them as an option at the time of purchase, and some dealers may also sell them separately from a new car. If you’re considering buying one, it’s important to understand what they do and don’t cover so that you can make an informed decision.
The answer to whether you should buy an extended warranty depends on your driving habits, how long you plan on keeping the vehicle and the cost of replacement parts in your area. Generally, an extended warranty is a good idea for drivers who want to avoid the risk of paying for expensive repair bills out of pocket. It’s also helpful for those who frequently drive long distances or for work and are concerned about the possibility of a breakdown.
If you’re planning to keep the vehicle for a few years, an extended warranty might pay for itself in the form of lower repair costs or higher resale value. However, it’s important to remember that even with a warranty in place, there’s no guarantee you won’t need to pay for some repairs.
Some reputable consumer advocacy organizations, such as Consumer Reports, recommend against purchasing an extended warranty. They argue that the warranties “have many gotchas and rely on contract fine print to deny coverage for almost anything.” However, if you have an emergency fund and plan on keeping your vehicle for the long term, an extended warranty may provide peace of mind.
Extended warranties typically cost several thousand dollars, and they can add to the total cost of a vehicle if the buyer chooses to pay for them upfront or roll them into their loan. That’s a lot of money for something you might not need, and it could be better spent on a car that’s more reliable or less likely to break down in the first place.
Be sure to shop around and compare quotes before buying an extended warranty. You should also find out who’s offering the warranty and research them to see how satisfied customers are. Make sure the company has a solid reputation and a network of mechanics that will be able to service your car. Some warranty providers also restrict where you can get your car repaired, so that’s another thing to consider before committing to a plan.
Ultimately, it’s up to you to decide whether an extended warranty makes sense for your vehicle. It’s possible to find a good deal on one if you take the time to shop around and do your homework, but it’s also not necessary for most new vehicles. If you decide to skip the extended warranty, be sure to set aside the money you would have spent on it so that you can use it for repairs down the road if needed. should i buy extended warranty on new car