Extended Warranties: To Buy or Not To Buy

Car buyers face the decision of whether it’s worth it to purchase an extended vehicle warranty. Some say the prolonged protection is worth it, but others say that it often does not pay off.

If you’re facing this choice, there are a few factors you should keep in mind.

Some extended warranties are better than others. Factors such as who is selling the warranty, when you purchase it and its particular terms can make a big difference.

Beat The Press

When you’re signing all that paperwork at the dealership, don’t be pressured to buy the warranty at that moment. You might do better to find a third party, or after-market, seller. That’s because dealerships frequently

substantially mark up the cost of their warranties.

Try To Anticipate

If you think there’s a good chance that the car you’ll buying will have a problem that will cause a major repair bill, and that you’ll have difficulty handling that bill, an extended warranty might be a good idea. Of course, it’s very difficult to predict such occurrences.

If you’re buying a new car, which typically is covered by a three year/ 36,000 mile warranty, think about your plans for after that period. If you think you’ll be getting rid of the car at about that time, don’t buy an extended warranty. If you might hold onto it for a long time, the warranty might be worth it.

Shop Smartly

A major auto maker or a highly regarded financial services company are probably the best places to buy warranties, if you choose to do so. Local dealers and other third parties might not be as reputable.

Know The Terms

It’s important to get a full accounting of what’s covered and what’s not, and to know the payment terms and conditions.