Should You Buy an Extended Warranty on a Used Car?
Many people consider buying an extended warranty on a used car because it can protect you from unexpected costs. However, the truth is that you can’t know whether it will be worth it until a repair actually needs to happen.
Basically, these warranties pay for repairs to your vehicle after the original manufacturer’s (OEM) warranty expires. They may cover mechanical, electrical and electronic failures as well as other problems such as engine and transmission problems, as well as some roadside assistance and trip interruption benefits. Most of these policies come with a deductible and some are more comprehensive than others. Some even include a free rental car or roadside assistance.
You can purchase these warranties from automakers or dealerships as well as third parties. Some manufacturers offer them as part of the purchase at the dealer while others offer them post-purchase. Some are financed as an extra to your car’s price and some are sold for a premium that can be paid upfront or rolled into the loan you get to buy the vehicle.
Generally speaking, warranties from OEMs are more reliable and cost less than those from third parties. But you should still compare prices and terms to find the best deal. You should also check whether you’ll be paying upfront for services and then reimbursed later or if you’ll be covered immediately by the policy after you submit the receipts to the company that backs it.
Other factors to take into consideration are how many claims the warranty provider expects you to make and whether it’s transferable in case you sell your vehicle before your agreement ends; whether it has a zero or low deductible; if the repairs can be made at a variety of licensed auto service centers and how long you have to wait before reimbursement is issued. In addition, you should find out if the seller could go bankrupt or whether your coverage would be affected by other circumstances such as if you failed to follow the vehicle’s maintenance schedule.
In general, an extended warranty will likely be worthwhile if your used vehicle has expensive parts that can be very difficult to repair or replace on your own. It may also be a good idea if you have little cash in savings and you can’t afford to pay for an unexpected repair bill without it.
Some of the most trusted and top-rated providers of these warranties are CARCHEX, who have been in business for more than 20 years; iDrive Auto Protection who provide a wide range of options with flexible terms and competitive rates; autopom! who work directly with more than 2,600 certified repair facilities and have a customer advocacy program; and Toco Warranty Corporation who are a relative newcomer to the industry but offer an excellent customer service and satisfaction guarantee. When it comes to deciding on the right extended warranty for your vehicle, research the plans offered, the companies who back them and compare prices to make the most informed decision possible. extended warranty on used car