So you’ve bought a brand-new car. Congratulations! Next, you’ll hear people start using terms like “Extended Auto Warranty.” This sounds very fancy. What does that mean for you and the wallet?
To start with, let us get one thing right. Extended auto warranties are not some kind of magical shield which protects your car. It is more of an extension to your manufacturer warranty. Think of it like a safety vest, not as a bulletproof one.
It is understandable that you might wonder whether the additional coverage will be worth your money. It’s expensive enough to buy a vehicle without having to add an extra line item. Now, things start getting interesting.
Imagine yourself driving down the highway. Suddenly, your car’s engine begins making sounds that would make any heavy metal band jealous. Repair bills that are comparable to a small trip could cost you thousands of dollars without an extended service warranty. With one? If you have one, it might be only a fraction.
But, hold on! Not all extended warranties offer the same coverage. Some only cover the basics — like powertrain issues — while others offer a more comprehensive coverage, including electrical systems and air conditioning units. It is vital to read all the fine prints and understand what you’re signing up for.
Let’s talk dollars now. Extended warranties may cost more up front but they are an investment in your peace of mind. Imagine never having to worry about a weird noise or warning light on your dashboard.
You can also look at the other side of this coin: What happens if your car never needs expensive repairs? In that case you’ve paid a lot for something you won’t ever use.
Dealing with warranties can sometimes be like being in a traffic jam. How many times have you tried to reach customer service but been placed on hold more than necessary to binge a full season of your favorite series? Yes, it is kind of the same.
The second twist is that some dealerships offer extended warranties of their own, while third parties also provide them. Each option has pros and disadvantages. Dealerships may offer a simpler solution, but it could also cost you more. Third-party plans can be less expensive but cause additional headaches.
Let’s sprinkle in some real life examples for good measure.
Joe, one of my friends, had his transmission break down two months following the expiration date of his manufacturer’s guarantee. He paid for an extended service plan so he ended up paying almost nothing to fix what would have cost $3,000 otherwise.
As an example, my cousin Lisa got a five-year-old SUV with a warranty that she hasn’t even used. She still drives around without any major problems.
What is the moral to this story? Extended auto warranty can be a lifesaver or a money pit depending on your situation.
Do some research before you make any decisions.
1) Compare different plans.
Check out the reviews.
Ask questions until the sky is blue.
4. Weigh the costs and benefits.
5) Most importantly: Trust your gut!
Final conclusion (wait…no final conclusions! In conclusion (wait…no conclusions! ), the decision whether to opt for extra coverage comes down primarily to personal preference and risk tolerance. Financial considerations are also taken into account.
Happy driving!