Is It Worth Getting an Extended Warranty on a Used Car?
You’ve picked out the car, you’re excited to drive home and you’re just about to sign on the dotted line when the dealer asks if you would like to purchase an extended warranty on the vehicle?
“It’ll give you extra peace of mind,” they say.
Do you buy it, or pass? Extended car warranties are said to help offset any repair costs after the purchase of your new car; however, there are a lot of factors that come into play when determining whether or not an extended auto warranty will be worth it in the end.
We wish we could just give you a quick yes or no answer, but making a smart decision about spending additional money begins with understanding how auto warranties work and what your warranty will cover. So, let’s dive into some of the benefits of purchasing an extended car warranty and why we think it will be worth it in the end.
The Benefits of Purchasing an Extended Auto Warranty
Even though you may be the safest or most experienced driver out there, accidents can happen at any time – so in our eyes, it’s always better to be prepared for any unexpected problems. Most new and used-car dealerships offer customers a free, limited warranty that covers a car for the first 60 to 90 days of ownership. Yet, relatively few problems arise during that time period. It’s after that 60-90 day period you have to consider whether buying an additional warranty would be worth it to you.
Risk vs Saving
You may have a special bank fund that is set aside for any auto accidents or problems that may arise, however, in the case you’re not the greatest at setting money aside you’re going to have to upfront some cash to cover the cost of repairs, maintenance and other auto expenses.
Will you be ready for that?
Think to yourself, “Am I willing to pass up the extended warranty, and potentially have to upfront a lot of money for a repair, just to save a few extra dollars on my total monthly car payment?” Once you ask yourself that question, ask yourself one more time – we know how ancy you are to get out of the dealership by this time. BUT, this is a very important question to ask yourself. If the answer is yes, you have to be mindful that you’ll possibly have to pay for any and all repairs yourself. And, the chances are the amount you set aside won’t be enough to cover a full replacement if it’s an expensive product.
Purchasing an extended auto warranty on your new vehicle can at least guarantee that you’ll be protected against potentially crippling expenses down the road. Plus, if you’re financing the car, the dealership will roll the cost of the warranty into the loan, versus making you pay upfront. You’ll have a slightly higher monthly payment, but you won’t need to worry about coming up with any additional money at the dealership.
Just so you know: The cost of a warranty will differ depending on the dealership and the age, make and model of the vehicle, but one thing is for certain: the cost is usually much lower than what it’d cost you if the car suffers a major mechanical or system failure.
Peace of Mind
Putting all money aside, how much is your time worth? Whether or not you can afford expensive repairs down the road, buying an extended car warranty means you simply don’t have to bother with it. If a product were to break, a warranty will save you time and money in searching for a company to undertake the repairs. You can rest easy knowing that, if something happens, it’s not your financial problem.
Extended car warranties give customers the opportunity to avoid anxiety and financial loss of an unexpectedly high repair bill. Is the peace of mind knowing you won’t have unexpected expenses down the road be worth the cost of the extended warranty? This is something you have to really consider before signing your loan papers.
When a dealership offers you an extended warranty there’s typically a few to choose from. Dealerships want to make sure you’re leaving their lot happy, so if you don’t want an expensive bumper-to-bumper warranty, you can typically opt for a less expensive warranty that might not cover as much. The duration of the warranty is normally customizable, as well. So you don’t have to feel locked into anything if you’re not ready for too much commitment all at once.
Are Extended Car Warranties a Scam?
An easy way to think of an extended auto warranty is as ‘repair insurance’ once the manufacturer’s warranty has expired. Just like other insurance products, it’s all about your risk tolerance and if you’re willing to pay more for peace of mind and convenience.
On a strictly financial basis, extended warranties can feel like a waste of money if you never use it. But for example, think of fire insurance for your house – you pay each month for having this sense of security, but if you never end up having a house fire, do you end up wishing you did just to make use of the insurance you’ve paid into or are you thankful you’ve never had to deal with it?!
So if you never have to use your extended car warranty, that means you haven’t had to deal with any stress, financial burden or added worry about something bad happening to your car! Remember, it’s always better to be safe than sorry, which is why most independent car dealerships and third-party companies will offer customers an extended warranty .
Why You Should Get an Extended Warranty on Your Used Car
As we mentioned earlier, we wish we could give you just a simple yes or no answer on whether or not purchasing an extended car warranty would be worth it. But it really depends on your risk tolerance and whether or not you’re willing to pay for peace of mind.
To help ease your mind a bit, car warranties aren’t a scam and they’re not out to harm you in any way, shape or form! They’re just an added sense of security for those who might not have a special bank fund set aside for when life gets in the way.
After dedicating an afternoon (or more) to test driving, negotiating, and completing a pile of paperwork for your shiny new car, we want to make sure you walk away with everything you need. At Prestige Auto Mall, we give you the option to purchase an extended auto warranty for your vehicle, without any obligation. It’s there as an option if you so chose.
And since it’s our goal to help you find that perfect car, let’s get started now and see if you’re pre-approved in as little as 5 minutes!