Car repairs are a necessary, but sometimes burdensome expense. Although keeping your vehicle well-maintained goes a long way in preventing many major repairs, it can’t account for every scenario that could damage your car.
If your original manufacturer’s warranty is nearing its end, you might be considering an extended warranty. While extended warranties have a lot to offer, they’re not necessarily the best choice for every driver. For example, if you’re only planning to keep your vehicle for another year or two, does buying an extended warranty really make sense?
To help you decide whether you could benefit from an extended warranty policy, here’s a closer look at some of the pros and cons.
The Pros of Extended Car Warranties
Tailor your extended warranty to your needs
When you purchase a new car, you don’t have any say in what’s covered. Original manufacturer’s warranties can vary quite a bit depending on mileage and time limits, whereas extended warranties offer a greater variety of services. For example, your manufacturer’s warranty may have longer coverage on the powertrain but only covers bumper-to-bumper repairs for a limited time.
However, an extended warranty provider can extend the shorter warranty coverage by itself—so you don’t end up paying for anything else that you have coverage on for a longer period of time. Another example where extended warranties can be helpful is 24-hour roadside assistance for new vehicles that don’t have that included in the manufacturer’s warranty.
Coverage for expensive repairs and technology
Modern vehicles are more complex than ever—and they’re equipped with expensive technology, computerized equipment, and electrical wiring. When these things fail, they can be expensive to diagnose—and repair.
Since many of today’s vehicles are more mechanically reliable than they were in the past, the technological components of your car are one of the main reasons you may want to buy an extended warranty. If you do decide to buy an extended warranty, make sure it includes not only coverage for the most significant systems in your vehicle, but also technological features.
They increase your vehicle’s longevity
If you plan to keep your car for a long time, an extended warranty can help you increase its longevity by making it easier to get the repairs you need as soon as you need them. With some issues, the longer you wait, the worse the problem gets, and the more money you’ll eventually end up spending. Since extended warranties offset some of the repair costs, it’s easier to fit repairs into your budget ASAP.
The Cons of Extended Car Warranties
While all of the above may sound positive, extended warranties tend to have more downsides than benefits. For example, many warranty companies refuse to properly reimburse auto repair shops because they want to limit their payout. This can be as frustrating for the repair shop as it is for you to get repairs. The repair shop needs to get paid for their work; customers often get stuck in the middle and have to offset what the warranty companies refuse to pay with out-of-pocket costs.
If you’re considering an extended warranty, we always recommend reading the fine print! Here are some other negatives to consider:
“Like Part” Replacement Requirements
Many warranty companies will insist expensive component replacements (ex: transmissions, engines, and other large components) be replaced with “like parts”. This sounds great—until you realize it means your engine that failed at 80,000 miles can be replaced with a salvaged engine with up to 80,000 miles on it. This stipulation is often in the fine print and isn’t up for debate.
Maintenance Requirements
This is another requirement you’ll find in the fine print of many policies. Many warranties require you to follow the manufacturer’s maintenance schedule to keep the warranty in effect. If your transmission fails and there are no service records, your claim will be denied. Fortunately, if you DO follow the manufacturer’s recommended service schedule, the chances of major component failures are very slim.
Paying for the repairs out-of-pocket may cost less than the extended warranty
Extended warranty plans vary, but they average around $750 a year. If you have a reliable, well-maintained vehicle, you may not need repairs yearly. In this case, it will likely cost less to pay for the repairs outright as they come rather than waste money on a warranty you’re not really using.
Extended warranties come with limitations
When shopping around for an extended warranty, you’ll discover that in addition to a list of what’s included in each plan, there’s also a list of exclusions. Many types of “wear-and-tear” parts aren’t covered, for example—even though these are the parts that will eventually wear out and need to be replaced. It’s important to understand exactly what’s covered—and what’s not—before purchasing an extended warranty.
You may have to wait for coverage to kick in
Extended warranties don’t cover pre-existing issues your vehicle has; because of this, there are waiting periods to ensure your vehicle is in good working condition before your coverage actually kicks in. Typically, this means you won’t have coverage for the first 30 days and/or 1,000 miles after you’ve purchased a policy.
Lengthy Wait Times
Many (not all) warranty companies are extremely slow to respond. In some cases, it can take hours on hold for the service advisor and days to approve the payment, not to mention, extra delays like requests for more information. This is extremely frustrating for customers and repair shops alike—and the warranty company often shifts the blame to the repair shop.
Don’t Forget to Do Some Research
As you can see, there are several factors you should weigh before purchasing an extended warranty. Think about:
- How long you plan to keep your car
- The typical repair costs for your make and model
- How much you’re willing to spend on repairs
- The age of your car
- The types of coverage you need
- How quickly do you need to get reimbursed?
- Are you willing to pay out-of-pocket costs if your warranty doesn’t cover the repair costs?
If you decide an extended warranty is right for you, be sure to shop around and research different warranty providers before making a decision. And if you have any questions about typical issues your car has or recommendations on extended warranty policies, Express Auto/RV Care Center is here to help! Contact us today at (928) 305-0767 or send us a message online.
