Is an Extended Warranty Worth It?

by Lee Wyatt
(last updated August 23, 2013)

Chances are fairly good that if you have ever purchased a new or used car, truck SUV, or other vehicle, you have had the salesman offer you an extended warranty. Some people take them up on this offer, thinking that this is a great idea; while others turn them down thinking that it is nothing more than a scam. The question that you should ask yourself, before you decide one way or the other, is if an extended warranty worth it? Here are a few things that you should think about before you make your final decision.

  • How much extra does it cost? Extended warranties are not free, and frequently they are not even inexpensive. Some dealerships offer extended warranties as a flat fee, while others add a few extra dollars each month to your monthly payments. Make sure that you know which it is, and what the total cost will be (for example, how much will the extra cost on the warranty affect your monthly payment).
  • What will it cover? What many people don't realize is that most extended warranties do not cover everything on the vehicle. Even those that claim to be comprehensive, or "bumper-to-bumper" typically only cover a few things, and not everything. Before you agree to an extended warranty, you should know exactly what is covered and what isn't.
  • Are there any restrictions? There are usually some situations where even something that is supposed to be covered by the extended warranty won't be. Make sure that you read the fine print, and in what situations the vehicle will be, and won't be, covered. One example that has been seen in some extended warranties is that if you go to an "out of system" mechanic for work, it voids the extended warranty.
  • How long will it last? An extended warranty is exactly that, extended. This means that it will eventually end, so you really should know when that mile mark will show up. For example, will it be in five years, or will it be in 60,000 miles. This is a rather common end marker for many extended warranties, so be aware of that all important word: or. This one word means that which ever comes first (the five years, or the mileage) will be when the warranty ends.
  • What typically needs repairs? One of the more important things that you should definitely find out is what typically needs to be repaired on this particular model of car. If possible, ask to talk to the repair department of the car dealer, and ask them what the most common thing that they repair on that model of car, and how much it costs to repair each item. In addition, you may want to also ask how often that model of car has that problem.
  • How much out of pocket expense is there? Many times even if you have a warranty you will have to pay some money out of pocket. Think of it like a co-pay that you have to make even if you have health insurance. Before you sign you should ask to see a copy of the pay scale, and if you do sign you should keep a copy for your own records.

Now that you know a few things that you need to consider, you should have no problem deciding whether or not you should get an extended warranty. However, keep in mind that the answer to some of these things you won't get from the salesman at the time of signing the contract. This means that you may want to consider doing a bit of research prior to signing, or even going to the car dealership. In addition, keep in mind that you are going to be the only one that can decide whether an extended warranty is worth it or not.

Author Bio

Lee Wyatt

Contributor of numerous Tips.Net articles, Lee Wyatt is quickly becoming a regular "Jack of all trades." He is currently an independent contractor specializing in writing and editing. Contact him today for all of your writing and editing needs! Click here to contact. ...

MORE FROM LEE

Wisteria Care

If you are looking for a great way to add color and elegance to your landscape design, then one of the best ways to do that ...

Discover More

Preventing Fairy Rings

Fairy rings may have a magical name, and inspire thoughts of magical scenes and fantastic nights but they are nothing like ...

Discover More

Understanding Towing Capacity

Many people purchase a truck with the expressed interest of being able to tow things around. However, in order to do this ...

Discover More
More Car Tips

Buying a Car Online

Shopping online for a car can be both quick and easy. Even so, an online shopper must remember the basics of automobile ...

Discover More

Buying Cars Wholesale

Buying wholesale is a one of the best ways to get a great deal on purchasing a vehicle. Here is the way that you can get ...

Discover More

Determining If a Used Car is Reliable

It can be extremely frustrating to find that the new for you used car you just purchased is nothing more than a lemon. Avoid ...

Discover More
Comments

If you would like to add an image to your comment (not an avatar, but an image to help in making the point of your comment), include the characters [{fig}] in your comment text. You’ll be prompted to upload your image when you submit the comment. Images larger than 600px wide or 1000px tall will be reduced. Up to three images may be included in a comment. All images are subject to review. Commenting privileges may be curtailed if inappropriate images are posted.

What is six more than 8?

There are currently no comments for this tip. (Be the first to leave your comment—just use the simple form above!)


Videos

Subscribe to the Tips.Net channel:

Visit the Tips.Net channel on YouTube