Does an extended warranty provide value?

The potential buyer is likely to be more comfortable buying a used vehicle that comes with protection should something happen. An extended warranty will add value to your vehicle and justify a higher price. First of all, if you sell a car with an extended warranty, can you get more for it? If your warranty is transferable to the next owner, so is the peace of mind that comes with the extended car warranty. Given the opportunity to choose between two identical used cars, the one that includes an extended car warranty will have more perceived value.

One good thing to know is that the money you invest in an extended car warranty will not be lost if you decide to sell the car. Extended warranty coverage does not disappear upon transfer of ownership. When you market your vehicle, you can use the extended warranty as an incentive. This is a big sales pitch.

Typically, extended warranties are a relatively low-cost add-on to your expensive electronics, automobile or even home purchase. Therefore, it may seem like a no-brainer to buy an additional protection plan for a fraction of the cost of the item itself. When you buy a used car with an extended warranty, it can give you peace of mind and save money in the long run. To keep the value of their vehicle as high as possible, thousands of people invest in extended warranties for their cars.

These “extended warranties” may provide coverage immediately or after the original warranty runs out. Home warranties are another type of warranty that may seem valuable from the start, but may not be worth it in the end. Warranty length varies by manufacturer, but many offer three-year or 36,000-mile warranties, whichever comes first. Generally, an extended warranty does not follow the vehicle like a factory warranty does, nor does it stay with you after you make an exchange.

Generally, warranties follow the vehicle, not the driver; however, this may not be the case with a service contract. There are often many restrictions with extended warranties, including what is covered and where the vehicle can be repaired. Regardless of the exact type, extended guarantees are an investment in peace of mind that limits financial risk for a certain period of time. If you want to buy an extended warranty, remember that the price can be negotiated, just like the purchase price of the car.

Extended warranties are also known as service contracts, and you should read the fine print carefully before signing on the dotted line. With the dealer getting a desirable deal, the owner getting a higher value and the prospective new owner getting a well-maintained vehicle, the extended car warranty is a key part of this win-win situation. The exact terms and rates of the contract are determined upon validation of the vehicle information and acceptance by the provider of the extended warranty.

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