When considering an extended warranty, it’s important to think about your needs. Not all warranties are created equal, which means that you need to be able to tell if one warranty is better than another for your particular situation. Here are the top seven factors to consider when deciding if you need an extended warranty.
Table of Contents
- 1. The Cost of the Extended Car Warranty
- 2. The Length of the Extended Warranty
- 3. Exclusionary Policies
- 4. Choice of Auto Repair Shop
- 5. Full Rate Payout vs. Percentage of Repair
- 6. Direct Pay vs. Reimbursement
- 7. Reputation of the Company
- Pros and Cons of Extended Car Warranties
- Pros of Extended Car Warranties
- Cons of Extended Car Warranties
1. The Cost of the Extended Car Warranty
Obviously, you want to find the best extended car warranty you can afford. This doesn’t mean that you should automatically go for the cheapest warranty available, but you should make sure that the cost is within your budget. At the same time, you don’t want to pay more than you should for extended warranty coverage. So, it’s essential to have a budget in mind before you start looking for warranty.
2. The Length of the Extended Warranty
The length of an extended auto warranty is going to be a huge factor in your decision-making process. It’s important to know exactly when the extended warranty coverage will expire, especially if you plan on keeping your vehicle for a long time.
3. Exclusionary Policies
When you’re looking at extended car warranties, you need to pay close attention to the exclusionary policies. Some warranties exclude certain parts of the vehicle from coverage, which can be a major issue if something goes wrong with those parts. Make sure that you know exactly what is and isn’t covered before you buy the warranty.
4. Choice of Auto Repair Shop
Typically, car insurance companies have a list of shops that you can use. In some cases, insurers allow you to choose your own shop, as long as it meets their requirements. However, if your extended warranty gives you the freedom to choose any repair shop, it can be a big advantage.
5. Full Rate Payout vs. Percentage of Repair
When you have a major car repair, the bill can be expensive. If you have an extended warranty that pays out a full rate, you won’t have any out-of-pocket costs. However, the coverage that only pays a percentage of repairs is going to be a problem if you have a serious issue with your vehicle.
6. Direct Pay vs. Reimbursement
Another key factor to consider is whether your extended warranty company reimburses you or pays for repairs directly. Many auto warranties companies offer a reimbursement service, which means that it takes a while for you to receive the money after the repairs have been made. If you want a warranty that pays for repairs directly, you need to make sure that the company is reputable and will pay for the damages.
7. Reputation of the Company
Finally, it’s important to consider the reputation of the company that you’re going to buy an extended warranty from. There are a number of reputable companies, but there are also some that don’t have a positive track record. You need to make sure that you’re not putting yourself at risk by purchasing an extended warranty from a questionable company.
Pros and Cons of Extended Car Warranties
When you’re looking at an extended car warranty, there are a number of things to consider. Here are the pros and cons of getting an extended warranty:
Pros of Extended Car Warranties
Peace of mind
One of the biggest benefits of having an extended car warranty is the peace of mind that it provides. If something goes wrong with your car, you know that you’re covered and don’t have to worry about the costs. Of course, you need to make sure that you are dealing with a company of good standing.
Added protection
An extended warranty can provide extra protection for your car. This is especially important if you plan on keeping it for a long time. If something happens to your car, and you don’t have an extended warranty, you could be looking at a costly repair bill.
Coverage for major mechanical repairs
In the event that something goes wrong with your car’s engine or major mechanical system, you know that the bills will be paid. However, it’s a good idea to make sure that your warranty covers the things that you care about most.
Cons of Extended Car Warranties
Paying for something you may never use
One of the drawbacks of getting an extended car warranty is the fact that you may never have to use it. If you don’t have any major car problems during the time that you have the warranty, it may not feel worthwhile.
Cost
An extended car warranty is an extra expense. If you have a warranty, you know that you’ll be covered if something goes wrong. However, if you don’t have a warranty, you’ll need to pay for the repairs yourself.
Limited coverage
Not all car problems are covered with extended warranties. It’s important to do your research and read the contract, so you know what you’re getting with an extended warranty.
When you’re considering an extended warranty for your vehicle, it’s essential to think about these seven factors. If you’re not sure whether you can afford a warranty, take a look at online calculators. It’s a good idea to check your car’s current value, your driving history, and the costs of repairs. Consider all these factors when you’re looking at extended car warranties. Plus, don’t forget to look at the reputation of each company that you are considering.
Also read: Buying A Used Car: The Ins and Outs of Working with an Auto Dealer
