An extended auto warranty is a topic that raises a lot of questions. To some, it’s a solid investment that saves a lot of money. On the other hand, it’s a useless contract for others.
If you’re looking to avail yourself of one, you need to know how it works.
Why an extended auto warranty is important
Let’s say your car needs a major repair, and your traditional or original warranty has expired. In this case, you’re going to need a lot of money. Also, it’s not always possible to avoid deep scratches or dents on a car, no matter how skilled a driver is. This is where an extended auto warranty comes in.
Extended warranty is pretty much similar to health insurance; you may not need it very often. But at least you can be at peace when the time comes. Who knows, your financial situation may be at worse when there is a need for costly repairs. So, it’s always better to have a backup plan.
Do you need it?
Not everyone has the same needs when it comes to automobiles. Some people buy new cars and use them only for a few months, while some keep them for many years. A service contract may not be very beneficial to those looking to keep their car for a short time. But if you’re buying a car for long-term use, an extended auto warranty is necessary.
Below are some reasons why an extended auto warranty is a good idea.
Gets your car repaired without spending money.
Modern cars have sophisticated parts, they are expensive, and it’s not easy to work with, unlike older models. The more you drive your car, the higher the need for repairs, and it can be even more costly than paying for a service contract. Although not all types of repairs come under warranty, most of the replacements or repairs are free even after the regular or traditional warranty expiry.
This also means that you don’t have to tap into all your resources, including emergency funds, when you need a major repair. In other words, it gives you peace of mind since you know that your bills are covered no matter what happens in the future.
Increase the trade-in value of your car.
After the expiration of the warranty, most car owners tend to ignore minor repairs such as small scratches and rusts. But it’s a different story when you have an extended warranty. It’s very likely that anyone would get a car servicing if they don’t have to pay the bills.
In the used car market, the value of the car depends on how frequently it has been serviced and its history. With a longer warranty period, you can be sure that the condition of the vehicle is excellent, and with a good history, you can increase its price tag. It is for this reason; many people invest in an extended warranty.
Coverage and purchase options.
There was a time when the warranty was provided only by the Original Equipment Manufacturer or the dealer. Those days are long gone, now there are a lot of different companies that offer excellent warranty terms. The only thing you have to do is analyze the coverage plan and choose your plan accordingly. And what’s even more exciting is that you can even purchase an extended warranty after the original warranty expiration.
Things to consider before buying an extended auto warranty
There is no doubt that an extended warranty is pretty costly. This is why you need to look into several factors before paying for it. The following are some of the most crucial factors you need to consider.
When to purchase.
The best time to purchase this package is when you’re driving away with a brand new car. Some companies offer warranty packages only at the time of purchase, and you may have to pay extra money later on. If you’re buying a new car and you’re not satisfied with the original warranty, you should consider getting an extended warranty from the manufacturer after considering the coverage plan.
But if you’re not happy with their warranty plan, check out the third parties that offer better plans. This makes little sense if you intend to keep the car for a few months or a year or two.
It can be very inconvenient if you have to visit a specific service location every time you need to do repairs. You should opt for the one that has at least a few service locations you can choose from. This will allow you to get easy access to the repair shop regardless of where you are, whether you’re on your way to work or on a long trip.
What is covered.
It would be wise to know exactly what you are paying for. So it’s really important that you go through each and every detail of this part thoroughly. If you have sound knowledge about the particular car you’re buying or about automobiles in general, it would be great. Its okay if you don’t know much about cars, you can always seek help from others.
All you need to do is ask as many questions as you want. Most modern cars have lots of electrical components that are very fancy, and these parts are less predictable. So it would be great if the warranty covers the electrical parts.
Reliability and reputation of the company.
Now, this is an extremely important factor to consider when paying for an extended auto warranty. You need to make sure that the car’s manufacturer has a good history and a good reputation, the same applies to third-party sellers. It is also a good idea to do research on the model you’re picking.
Some cars can cause several issues although a well-known company has manufactured them. If you happen to like one of those models and decide to take it home, ensure that the known issues are covered under warranty. This way you will not be disappointed later on.