If the thought of car repairs keeps you up at night, an extended warranty may help you get some rest. These warranties are available through dealerships, auto clubs and insurance companies (which also call them mechanical breakdown insurance). The contracts vary in terms of coverage and price. If you’re considering one, start by getting quotes from multiple providers and read sample contracts to understand exactly what you’re buying. You may find that a plan with more coverage is worth the extra cost.
Consider how long you envision keeping your car and what type of driving you do. If you drive a lot of miles, it might make sense to buy an extended warranty with a high mileage cap and short time horizon. If you tend to run into parked cars or clip curbs, a warranty that covers these types of damage might be worthwhile.
A reputable warranty provider should offer 24/7 roadside assistance, rental car reimbursement and other features that add value to the contract. However, you should be wary of any warranty products that require a waiting period or exclude preexisting conditions. These plans may not add much resale value to your vehicle or pay for any repairs you need right away.
It’s not unusual to see several third-party providers mentioned within the first couple of search results. Some dealerships even sell third-party warranties instead of their own factory-backed offerings. If the dealer is promoting a third-party warranty over the manufacturer’s, you should ask them why. In some cases, the dealer has a relationship with the third-party provider and can sell the warranty for less than the manufacturer’s.
You should also look for a warranty provider that lets you bring your car to any repair shop in the country, instead of forcing you to use a specific facility or paying only for parts and labor at a particular location. You should also check the contract for any deductibles and other restrictions.
If you decide to skip the warranty, consider saving the money you would have spent on it in an emergency fund or a separate car repair fund for your family’s vehicles. You can also save that money for a down payment on the next car you buy or for trade-in value when it comes time to upgrade. Remember that used-car values are always changing, so keep an eye on Edmunds to know how your car might perform over time. And if you’re buying a used car, be sure to run a free Carfax report before you sign the dotted line. This report can reveal the car’s history and any outstanding recalls, as well as alert you to any possible issues. This way, you’ll have more knowledge of the car you’re about to purchase and be able to negotiate with confidence. This is particularly important if you’re financing the car. You should ask the dealer to break down the total cost of the purchase, including the warranty. This will allow you to comparison shop and get the best deal on your new ride. buy extended warranty for car