Should I Buy an Extended Warranty?
If you have ever bought a car, then you have probably heard the pitch to purchase an extended warranty along with it. The word “warranty” carries with it a certain peace of mind for a lot of people, and a wariness and skepticism for others. Here are a few questions to consider so that you can feel informed and prepared to make the decision about an extended warranty before even entering the sales office.
- How long will you keep the car? Nearly all new cars come with a 3 year, 36,000 bumper to bumper warranty. If you plan to keep or lease less than 3 years, you do not need the extended warranty. On the other hand, if you are planning to drive your car longer than 3 years, consider an extended warranty that will go into effect once your factory coverage ends.
- Can you buy the warranty later? Yes, but you might find that it’s easier to lump your warranty into your car payments, and most warranties are transferable if you decide to sell. If you decide not to get the warranty at time of sale, you can consider an extended warranty later on when you expect to actually need to use it. After a few years of driving the car you will also have a better idea of how much you really like it and how much trouble it has been.
- Will you even use an extended warranty? The warranty will cover things that BREAK on your car - not routine maintenance. Consider your personal finances. If something were to unexpectedly put your car out of commission, could you afford to fix it out of pocket? When budgeting for a new car, factor in what routine maintenance such as oil changes or new tires might cost, and consider what you will have left to put towards unexpected things that “break” on your car. A warranty could give you a peace of mind for these unexpected and unplanned costs.
- Will repairs cost more than the warranty itself? It depends. If the whole electric system goes on the fritz or the transmission falls out - you are going to be patting yourself on the back for getting that warranty. Not every repair will be as substantial though.
Ultimately, your decision about whether or not to get an extended warranty for your car will be based on your personal finances and your need for comfort/preparedness when it comes to unexpected car issues. It is worth mentioning, if you opt to get an extended warranty on your car initially and then end up changing your mind, you can cancel it and get a prorated refund in return.