Buying a new car is a whole new experience—regardless of whether it’s your first car or just one more addition to your car collection. However, the entire process of buying a new car can be incredibly stressful for many people. This is because buying a new vehicle often requires a lot of research before making a purchase to figure out which car suits your budget, and offers you the most features within that set budget.
And just when you thought you thought of everything involved in a new car purchase—from car loan approval to car financing, the sales person asks you if you want to buy an extended warranty? Before you make that choice, here’s how to compare the pros and cons of purchasing that extended warranty:
How does an extended car warranty work?
Most new vehicles come with a warranty that’s included in its sales price. However, if they don’t, you have to decide whether to buy an extended car warranty or not. Buying an extended car warranty is all about your personal preference for taking the risk.
Therefore, it is important to weigh the pros and cons to determine whether you should buy a car warranty or not.
What are the Pros of buying an extended warranty for your car?
- Car warranties are customizable
Consumers can customize their extended car warranty as per their specific needs. So be sure to enquire with car financing companies about the great variety of services and products they offer, along with your car warranty.
- Tech and mechanical repairs
Most extended warranties also cover expensive repairs and technology upgrades. Modern cars come equipped with more complex equipment and technology, but a car warranty from any decent car financing company will offer coverage to fix all of these complex technical and mechanisms if they malfunction.
- Hassle free
Car dealers typically handle all the paperwork and documentation associated with warranties. So, you don’t have to get involved in every detail of the process. This makes car buying hassle-free compared to past purchases.
What are the Cons of buying an extended warranty?
- Warranties are risky
It is risky, as you cannot predict the future. Moreover, warranties cost extra, aside from your car purchase, so you may be paying for something you will never use.
- Not everything is covered
Car warranties don’t always cover all repairs. For instance, most car extended warranties offer bumper to bumper coverage. However, some come with a list of exclusions that only covers specific repairs, parts, and systems. So before you buy, make sure what’s and what’s not covered under the warranty.
- Limited providers
Many warranties limited where and who can repair your vehicle under the warranty (i.e., dealership). You must adhere to this approved repair provider list to have your repairs covered under warranty.
So, before buying an extended warranty, you need to ask yourself the following questions:
How long are you planning to keep your car?
If you only plan to keep the car for the year, a warranty may not be worth the risk or money. However, if you plan to keep the vehicle for a couple of years or longer, you might need warranty coverage.
Have you done the full research?
Only buy a car after doing a complete research on car brand, mileage, car financing, and extended warranty. If you’re buying a used car, then you must be fully aware of its previous repair history. It is best to know about the full details of the problem areas before buying an extended warranty.
Are you getting the best price?
Your car dealer may say the warranty price is not negotiable. However, often you can negotiate price if you’ve planned ahead and called the dealership to ask about warranty pricing before visiting the dealership. Also, be sure to inquire about warranty prices at competitor dealerships in your area to get the best deal.
Will you regret the decision?
If you’re a worrier who will stress about car repairs later on, buying the extended warranty upfront may offer you much needed peace of mind. However, if you feel financially pressurized and think you may regret buying the warranty, then don’t go for it. Do what you feel is the best for you.