Despite the added cost of extended car warranties, they can provide peace of mind, but do they actually add value to your car driving experience?
Some drivers swear by extended warranties while others think they are a waste of money. Some people worry that things that would have been covered under the traditional warranty will break as soon as the warranty period expires. In modern vehicles, that’s not typically the case, but modern vehicles also have more electronics and moving parts than ever before. It seems an extended warranty might be worth the added cost in some cases, but not all.
What is an extended warranty?
An extended warranty is exactly what it sounds like. It provides continued protection of your vehicle for certain repairs and parts after the original warranty period. These warranties are usually more limited than the traditional car warranty offered by your manufacturer. Coverage can vary from plan to plan, and they generally don’t cover routine maintenance or consumable parts. Still, knowing your vehicle is covered for some repairs, parts, and situations beyond the traditional bumper-to-bumper warranty period can provide you with significant peace of mind.
Do you need to extend your coverage?
Some people swear that extended warranties are only offered to boost the commission of the person selling you the vehicle. That’s certainly not the case, but you still need to determine whether or not you should have extended coverage on your new vehicle. This can depend on how expensive the extra coverage will be and whether or not this expense fits into your budget. It’s also important to know what’s covered under the extended car warranty program.
Here are some things to consider:
Can you afford the extra coverage?
Can you afford an unexpected vehicle repair bill when the standard warranty period has ended? Will you drive more miles than the coverage allows because you do a lot of driving? If you’re concerned that your vehicle will suddenly break down as soon as it hits 36,001 miles, you should probably consider an extended coverage program, as long as you can afford to fit it into your budget.
Note: It’s a good idea to pay cash for your extended car warranty to avoid this cost being added to your monthly payments, which you pay interest on.
Do you trade cars often?
If you’re in the habit of driving a new vehicle every three or four years, you might not need to secure an extended warranty. In fact, some vehicles come with incredible warranty coverage from the factory, which means you might never reach the mileage that would require extended coverage. The Kia Telluride is an example of a vehicle with an excellent warranty. It comes with a 5-year/60,000-mile basic warranty and a 10-year/100,000-mile powertrain warranty, which could be more than enough for you.
Does your new vehicle have tons of tech?
Are you buying a high trim level model with lots of electronic bells and whistles or the basic model? Extended warranties can be valuable for higher trim levels because the electronics can be expensive to repair and are not part of the powertrain coverage, except for those electronics directly associated to the powertrain. This means a little extra money for an extended warranty could be worth it in the long run.
When does an extended warranty kick in?
When you purchase a new vehicle, your extended warranty doesn’t begin to cover your vehicle until the automaker’s factory coverage ends. You may have to pay a deductible for any warranty repairs under your extended warranty program, but this can be a nominal cost, especially when you consider the cost of some new parts and services in modern vehicles.
Note: Learn how your warranty company handles claims so that you know whether or not you must pay up front and be reimbursed.
What should you ask about extended warranties?
It’s important to get all of the information up front and understand that your vehicle is covered for some repairs, and you might be responsible for a deductible. Some questions you should ask before choosing an extended vehicle warranty are:
- What does the contract cover?
- How will the covering company reimburse you for repairs?
- What’s the process for getting repairs approved?
- Where can the vehicle be serviced?
- What company backs the warranty?
- Is the extended warranty transferable?
- What extras are offered?
You have to choose for yourself to either buy or decline extended warranties when shopping for your next vehicle, but they can be valuable to some drivers while a hindrance to others.
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