Buying a new or used vehicle is a big decision. You have to factor numerous elements into your purchasing decision. This is even more complex when buying a used car. In the instance of a used vehicle purchase, even more research is required to ensure a sound investment. From researching and validating the vehicle’s history to comparing its reliability to other similar vehicles in its class, all the way to its current mileage and the entries on the owner’s repair manual log.
Without a doubt, purchasing that new or used car is an extensive process that should result in you obtaining a reliable vehicle you can use for years to come. During this process, regardless of whether you buy new or used, you’ll want to explore your options with an extended auto warranty. The question at hand here, however, is this: Does it make sense to buy one of these warranties as opposed to just paying for the cost of repairs as they arise?
So where does an extended warranty fit into this picture? If your car breaks down after the bumper-to-bumper warranty expires, you’ll have to pay to get it fixed. But if you bought that extended warranty, as the dealer recommended, the repair will be made at no cost to you.
Extended Warranties in a Nutshell
All new cars come with a manufacturer limited warranty, commonly referred to as a “bumper-to-bumper” warranty because they cover just about any defective part in the car, from front to back, or from bumper to bumper. The purpose of an extended auto warranty is to add coverage miles and years to this warranty, thereby extending it.
For example, say your car comes with a three-year warranty that expires three years from purchase or at 36,000 miles, whichever comes first, commonly referred to as a 3-36, an extended warranty could add as many as 60,000 miles and five years of coverage on top of this. It’s important to keep in mind that an extended warranty doesn’t kick in until the manufacturer’s warranty expires, which brings another point to mind: Should you wait to buy one?
When Should You Buy an Extended Auto Warranty?
When considering your options with an extended auto warranty, there are two factors that come to mind immediately: When should you buy one and where should you buy it from?
The reality is that the dealer will press you buy a warranty from the get-go on any new or used car because its an upsell for them that has an established profit margin. In most cases, the warranties being offered by the dealer are viable and sound. But many times, they are also pricey and may not give you the coverage options you’ll need later on, when a big repair is necessary that can really eat into your wallet.
Does it make sense to forego the purchase of an extended auto warranty at the risk of paying for a costly repair out-of-pocket later?
Consider these two questions first:
A Different Approach
One thing that your auto dealer won’t tell is this: You don’t need to buy the warranty from them, you don’t need it right away if your car is covered at the time of purchase with an existing warranty, and you can save more money by purchasing an extended auto warranty through a third-party at a later date.
In fact, you can get an extended auto warranty at any point in time for a solid price provided you purchase it before your existing manufacturer warranty has expired. This will give you an advantage because you can gauge the reliability of the vehicle, based on its repair history, while also factoring average repair costs.
In some cases, you may find that it makes sense to avoid adding this valuable coverage after the fact. But in most cases, you’ll see the immediate benefit that these added vehicle protection plans have to offer in the long term.