When it comes to the long-term cost of your car, extended warranties are usually “a bad deal,” Gillis says. In a Consumer Reports survey, 55% of people who purchased an extended warranty never touched it. Among those who did use the warranty, most saved less on repairs than they paid for the contract. If your car doesn't experience any major problems, you may spend more money on the extended warranty than on car repairs.
However, an extended warranty for a used car can provide considerable peace of mind to the owner. Many extended car warranties are transferable for a small fee, meaning you can provide the new owner with comprehensive vehicle protection. Individual buyers may see additional value in your vehicle due to their service contract, resulting in higher interest and a higher overall sales price. More comprehensive car warranties will cover more faults, such as some wear covers, but will be more expensive.
You would have to weigh whether it is worth paying the extra cost or whether it would be cheaper to pay for repairs yourself if a problem appears. An extended car warranty, or vehicle service contract, promises to pay certain car repair costs after the factory warranty expires. Unlike car insurance, which covers you in the event of a collision, extended car warranties protect against mechanical breakdowns or manufacturing defects in materials or workmanship. There are many types of vehicle service contracts available, the most common of which are a comprehensive warranty and a powertrain warranty.
Many warranty companies also offer enhanced powertrain warranties that include coverage for other important systems, such as air conditioning and brakes. However, an extended warranty may not be worthwhile for all drivers. Below, we've compiled a list of pros and cons for you to consider before deciding whether to buy coverage. Now that you know how much a warranty can cost you, let's see how much you can pay out of pocket for repairs without a vehicle service contract.
We look at the five most popular car brands in the U.S. UU. And compiled a table of their average annual repair costs, according to RepairPal. You usually have to purchase an extended warranty from the manufacturer at the time of purchasing the car or before the factory warranty expires.
Unfortunately, this doesn't give you much time to decide if you really need longer coverage. Term limits for extended manufacturer's warranties usually reach a maximum of around 100,000 miles, which is not very long compared to third-party contracts. Our expert review team is happy to provide accurate and unbiased information. We identified the following rating categories based on consumer survey data and conducted extensive research to formulate the rankings of the best car extended warranty providers.
Understanding warranties can be confusing, so it's important that you understand what you would pay to decide if an extended warranty is worth it. If you decide to get an extended auto warranty, it's worth comparing online coverage from independent providers to see exactly what each policy covers, what is excluded, and how much it costs. If you want to buy an extended warranty, remember that the price can be negotiated, just like the purchase price of the car. There are lesser-known ways in which car warranties prove their worth by helping customers in stressful situations.
However, you may be wondering if you really need to pay a guarantee, especially if you consider all the other things you have to pay when you have a car, such as insurance and taxes. Expanded car warranties are worth it if you want your coverage to continue after the factory warranty expires. Some manufacturers will offer extended warranties once the initial warranty expires, but they are also available from dealerships when you buy a car, as well as from independent online suppliers. Most extended warranties are transferable and can make your car more attractive to potential buyers, but they won't greatly increase the resale value of your car.
Not only does the value of the extended warranty depend on the provider, but it also depends on the research and due diligence you perform to choose the most reliable and personalized coverage. Different drivers have different coverage needs and may receive different quotes depending on where they live, the car, the vehicle they drive, and a host of other factors. An extended car warranty is a type of insurance policy that covers the cost of parts and repairs if you find a mechanical or electrical fault in your vehicle. For example, CARCHEX allows you to take your car to any authorized repair shop, while a manufacturer's warranty usually requires that the car be taken to a specific dealer.