It can be difficult to know how to buy a used car extended warranty. An extended warranty is a contract for work and repairs to your vehicle beyond the standard warranty that may (or may not) come with the purchase of your car.
Extended warranties are usually offered by dealerships where you purchase your car. Start with local dealerships who sell the make of your vehicle. Dealerships that offer warranties usually have a service department on site, and for the most part are straightforward and solid in service. Another option is to purchase an extended warranty online. A quick Internet search will link you to several aftermarket (not through a manufacturer) companies like Warranty Direct or AAA Auto Protection. Companies sometimes offer payment plans for buyers wanting to purchase an extended warranty.
Warranties sound like a good idea for the most part, until you start to learn what's covered and what's not. It's wise to understand what terms like "bumper-to-bumper" really mean. To what extent are the electrical and engine systems covered? These typically are the priciest repairs. Most extended warranties do not cover parts that need replacement due to wear and tear: light bulbs, brakes, brake pads, u-joints, gasket seals, and so on. If you're purchasing a vehicle that's more than a couple of years old, these parts may need replacement, and it's important to understand exactly what the extended warranty covers. Additionally, it's prudent to know how the warranty works. Do you have to pay the costs up front and then file a claim, or are you required to bring the car to the dealership from which you purchased it?
Find out how much of the original factory warranty remains on your vehicle. Most new cars come with a standard 24,000 miles/two year or 36,000 mile/three year manufacturer's warranty. If you have a used car that is a year old with 12,000 miles on it, and it has a 36,000 miles or three year factory warranty, you may want to reconsider purchasing an extended warranty. Remember, the intent of the extended warranty is to extend beyond the service of the manufacturer warranty. If you still have life left on the existing manufacturer's warranty, the service of your extended warranty won't be tapped into until after that manufacturer's warranty has expired. There may be levels of extended warranties that will cover parts and service that the manufacturer's warranty does not cover. Read the contract and ask questions about what is and isn't covered before making a decision to purchase.
Warranties that come from auto manufacturers are generally more expensive, but have good ratings for service. Warranties that come from independent companies who aren't auto manufacturers (aftermarket warranty companies) are often cheaper, but may not offer the same level of service in the event the company should fold or merge with another aftermarket company.
Several factors could make buying a warranty on your used vehicle the right idea for you.
The first factor to consider is peace of mind. Knowing you are protected in the case of mechanical failure is often worth the cost to many people. Having to deal with unexpected expenses because of auto repairs can often be stressful. Extended warranties give drivers the peace of mind of knowing that the repairs are already paid for. Older vehicles are more likely to experience mechanical failure and an extended warranty helps ease that burden. Additionally you have no idea how the previous owner treated your used car. An extended warranty provides you the peace of mind of knowing that when something goes wrong you are protected.
In recent years online extended warranties have also become popular, enabling buyers to shop around for a wide variety of prices and options. Purchasing online allows drivers to choose a mechanic of choice instead of having to bring the vehicle to the dealership. Online buyers have their choice from dozens of potential warranties and prices allowing them to pick exactly the best policy for their needs. Extended warranties can save drivers money in the long term which is another added benefit. Sometimes it only takes several repairs for the warranty to pay for itself and in some cases one large repair could do it.
Another reason drivers may be interested in an extended warranty is the expertise of the mechanics that will do the work. With certified mechanics that work for dealerships you know you are getting quality work by a reputable dealership or mechanic. This is especially important for electronic or computer parts.
Extra benefits could include roadside assistance or regular maintenance depending. Having the peace of mind that if your vehicle breaks down in the middle of nowhere you are covered for towing and roadside assistance is often worth the cost of the warranty. Some warranties also offer additional services such as schedule maintenance for things like oil changes and tire rotations or even yearly inspections. You could also get rental car reimbursement.
Extended warranty plans won't cover every aspect of your vehicle, and it is important to understand what you are buying. Be careful to fully read and understand your warranty prior to buying it. Make sure you pay close attention to the length and mileage and what is and isn't covered. Some warranties allow you to buy additional protection so if you are worried about an aspect that isn't covered be sure to ask your provider about the options you have.
