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

Using a Juicer

Whether you are looking for ways to improve your nutritional intake or you are simply looking for ways to have some great, ...

Discover More

Cooking Schools

Cooking schools are like just about every other kind of school in the world—a place that is designed to teach or give ...

Discover More

Basic Vacuum Repairs

There are a variety of reasons that a vacuum can begin to act funny, and almost all of them can be found within the average ...

Discover More
More Car Tips

Tips on Buying Your First Car

There's so much to learn in terms of negotiating a good deal on your first car. You need to apply for financing and, of ...

Discover More

Buying a Used Car from a Dealer

Buying a used care, while daunting, is easy for the well-prepared savvy shopper. The tips and techniques discussed here will ...

Discover More

Getting a Used Car Checked by a Mechanic

Making sure that a used vehicle is mechanically sound j is an extremely vital step in purchasing any new for you car. Here ...

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 7 + 7?

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