What is an extended warranty on an automobile?
The extended warranty, which goes by different names, is an additional automobile insurance that covers the repairs made to a new vehicle when the manufacturer’s warranty expires.
Do you need an Extended Warranty?
The extended warranty, which goes by different names, is an additional automobile insurance that covers the repairs made to a new vehicle under the manufacturer’s warranty.
What are the various types of extended warranties?
There are two general types of extended warranties.
- Extended warranty offered by the vehicle manufacturer (the option better known by consumers). It means extending the original warranty, allowing customers to continue taking their vehicle to the dealer for service and repair.
- The extended warranties offered by a maintenance services provider, or by an insurance company. These warranties allow services to be performed at many different locations, including the dealership. Since the extended warranty is offered by a third party, customers may have to pay the repair themselves and submit receipts for reimbursement.
What are the benefits of an extended warranty?
- An extended warranty covers unexpected repairs and related costs without financial repercussions.
- An extended warranty is a safeguard against unexpected vehicle repairs. .
- It represents an advantage for both the seller and the buyer because it increases the resale value, which gives peace of mind.
- It often includes services such as: free towing, rebates on car rental, road assistance for the loss of a key or a mechanical breakdown while travelling.
What is not covered by the extended warranty?
Extended warranties cover most major car components, but they are not nearly as comprehensive as the bumper-to-bumper warranties that come with a new vehicle. Even the most comprehensive extended warranties have exclusions for items such as the windshield, headlights, or light bulbs. Parts such as the tires, brakes and shock absorbers, which degrade with normal wear, are very seldom included. The subtle differences between extended warranties offered by different providers are often found in the exclusions.
Does my vehicle need an extended warranty?
An extended warranty is ideal for someone on a fixed budget who does not want to be surprised with expensive repair bills If that describes your situation, and you plan to keep your vehicle longer than the length of the original manufacturer's warranty, it would be wise to purchase it. As with all insurance policies, it is a good idea to do some research on the car so you can find out how dependable the car is and how much repairs will cost.
A car with a good track record may not be a strong candidate for an extended warranty. You can find vehicle dependability and quality ratings for almost any car on the web.
A vehicle with low repair costs may also not be ideal for an extended warranty. Repair costs vary greatly between makes and models, and it may be less expensive to pay for minor repairs out-of-pocket, rather than purchasing an expensive warranty. Before taking a warranty, it is wise to check the price of some components such as the alternator, which may double or triple from one vehicle to another, in order to assess the cost of the repairs.
If the manufacturer’s warranty is still in effect, you may also be able to avoid the extended warranty. Take a close look at the existing warranty. There is no reason to double the coverage if it still applies for a few years. Remember, you can always buy an extended warranty just before your original warranty expires.
Choose an extended warranty according to your needs
As is the case with any automobile insurance product, some policies are more expensive than others, and some are more restrictive than others. If you purchase an extended warranty, choose one that matches your budget, offers an interesting deductible, and is transferable to the next owner. If you do your homework, you might be able to find a car insurance policy that covers most repairs, in addition to be profitable thanks to the enhanced resale value it provides.