Understanding the main pros and cons of extended car warranties helps you make an informed decision about whether extended warranties are worth it or are just a waste of money.
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Extended warranties are great options, so you don't have to worry about your vehicle's repairs after the initial manufacturer warranty expires. There's nothing more frustrating than sitting in the repair shop hoping for the mechanic to identify weird damage is in your vehicle and taking care of all repair costs that can be a huge hassle.
This article provides you with what you need to know about extended car warranties' main pros and cons. It helps you understand the meaning of an extended warranty if you are not familiar with it already, and it also allows you to make a wise decision about whether to seek an extended warranty or not.
What does an extended car warranty mean?
Before we dive into the details about the main pros and cons of extended cover and teas, let's make sure that we're both on the same page regarding the meaning of this warranty. There are plenty of drivers out there who don't know what it means exactly.
Think about the extended warranty as an Extended Service plan. Any new vehicle comes with an initial manufacturer warranty that could be bumper to bumper or probably a powertrain. The manufacturer warranty does not last forever, and there will be a point of time where you where it will be expired. At that time, it is your full responsibility to pay for any unexpected repairs without any help.
When choosing to go with an extended warranty, you will pay extra dollars in case something happens to the car. By paying these extended warranties, it's like you are prepaying for any future repairs without taking the full responsibility of pricey ones.
The extended warranty is never like the initial manufacturer warranty but, it has certain flexibility to help you add as many features and help as available at your manufacturer. Deciding on how much it will cost you to seek an extended warranty depends heavily on the plan that you choose, your vehicles type, and the manufacturer.
While the extended warranty is a great option, it is not mandatory. In other words, you have the right to purchase an extended warranty or not, depending on weighing the main pros and cons of each option. Also, you don't have to purchase the extended warranty immediately after the initial manufacturer warranty expires. You can't decide whenever you're ready to purchase this warranty or not.
What are the main pros and cons of extended car warranties?
By now, you have a good understanding of what does the extended warranty mean. The next step for you is to weigh the different pros and cons of the extended warranty before making your final decision. Let's take a closer look below:
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Pros of extended car warranties
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Flexibility
One of the first and most important pros of seeking an extended warranty is flexibility. The initial manufacturer warranty does not have any flexibility, which means that you must accept it as is even if you don't need a lot of the included components.
On the other hand, purchasing an extended car warranty is very flexible and completely customized. Thus, you can add or remove items based on your own circumstances and within your own budget.
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Eliminate sudden repair costs
By purchasing an extended car warranty, you don't have to be shocked by sudden and unexpected car repairs. You don't have every time to open your wallet and pull from your savings to take care of the car problems.
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No more dealerships
The nice thing about extended car warranties is that you don't have to worry about purchasing them from the dealership. You don't need to be linked to the dealership forever because you can simply purchase it from somewhere else. Many drivers do not like dealing with dealerships, especially with coverage, because it can be a lot of hassle and they already done was the initial manufacturer warranty. Therefore, if you are one of those people who don't like to deal with the dealership regarding warranties, an extended warranty would be a great option for you.
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Longer car lifetime
When you face an unexpected car repair, if you are not 100% ready to take care of the problem immediately, you might delay it as much as you can so you get the money ready. Therefore, any minor issue can easily become more complicated, causing significant damage is.
The more you delay minor or major issues, the shorter the lifetime of your vehicle.
On the other hand, if you have an extended warranty, you don't have to worry about making arrangements to get the money ready for repairs. It can immediately put your vehicle at the repair shop and have the problem taken care of as soon as possible.
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Cons of extended car warranties
Yes, there are tons of advantages to purchasing an extended warranty; however, the extended warranty has its own drawbacks that you need to be aware of and prepared for before making a final decision.
Let's take a closer look at some of the common cons of extended car warranties:
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Not everything is covered
One of the biggest drawbacks about extended car warranties is that they're not the same as the initial manufacturer warranty. In other words, some of the minor wear and tear issues might not be covered under the extended warranty. Therefore, you must read the warranty language carefully and understand what exactly is covered. Sometimes, the extended warranty might not be worth it because all you are dealing with are minor issues that have to do with wear and tear.
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You might not need it
When you are seeking an extended warranty, you will pay extra dollars that you might not need at all. Like the insurance premium, you might not need it at all though you buy it.
The big difference between the extended warranty and the insurance is that insurance is a must. You can't drive the car legally without it, but the extended warranty is an option.
So, if you're not comfortable paying for a warranty that might not be used at all, you might not want to purchase it.
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Can be pricey
As you already know, the extended warranty is not free, which means you have to pay extra dollars for these benefits. The more the benefits, the higher the price.
Therefore, if you are on a tight budget, an extended warranty might not be the best option for you at this point. Remember, paying for an extended warranty is putting extra cash for expected damages that did not happen yet. The damages might not even happen at all.
Specific repair centers
The other thing to keep in mind before deciding on getting an extended warranty or not is the location where you're getting the job done.
Some extended warranties accept and approve only certain repair centers, which means that you can't go to your preferred mechanic next door to take care of your problem. You might need to drive for a certain distance in some scenarios until you get a qualified Registered mechanic accepted by the warranty.
Therefore, read the policy carefully and talk to the provider about where repairs should be done, and see if it makes sense to you.
What is the best-extended car warranty to purchase?
Answer this question depends heavily on your own circumstances. Determining the best-extended car warranty is very subjective and is based on your goals, budgets, and the provider.
Sometimes some extended warranties might provide certain items that you might not use while missing minor items that you will need continuously. Therefore, before deciding on the best-extended car warranty, you need to list the different goals along with your expected budget and shop for multiple options to see what works best for you.
Are extended warranties a waste of money?
There are multiple opinions from automotive experts regarding this point. Some experts see that the extended warranty is a must, especially if you're driving a commercial vehicle or an expensive car that requires very high repair costs.
However, other experts feel that the extended warranty can be a complete waste of money because, by the time the extended warranty expires, your vehicle will start dealing with the meteor appears. Therefore, the bulk of unexpected repairs at the early stages of your vehicle’s lifetime are not very expensive and might not be worth the extended warranty money.
Again, it is your situation that decides whether extended warranties are a waste of money or not. Compare the different goals and available extended warranty options to your budget to see if it's worth it or not.
What is a fair price for an extended car warranty?
Although extended car warranty prices differ significantly depending on many factors, on average, A fair price for an extended warranty is about $1800.
Usually, the extended warranty will come with good aftersales services and fairly enough quality packages that fit most drivers.
What is not covered under an extended warranty?
In most scenarios, extended warranties do not cover minor items that wear out. For example, you can't get the windshield wipers replaced under the extended warranty, same for the brake pads.
Also, extended warranties do not cover your regular maintenance is like tune-ups or time bolt replacements and oil change.
That's why many experts feel that an extended warranty can be a waste of time if not studied carefully and evaluated with caution.
Can you negotiate an extended car warranty?
Surprisingly, extended car warranties are situations where you must negotiate the price, especially if you decided to purchase it from a dealership. Usually, dealerships or ask first for a price that is 200% higher than the original extended warranty price.
Therefore, familiarize yourself with the typical ranges for extended warranty prices before conversing with the dealership. Keep in mind that dealerships are very good at negotiation and have certain techniques that make it a little hard to agree with them. Therefore, spend some time and effort because it's worth it at the end of the day.
How much do dealers make on extended warranties?
That is a great question! According to previous studies, most dealerships profit from extended warranties ranging from as low as $200 to as high as $500. There are situations where the dealership can make much more, and that's why we always recommend negotiating the price of an extended warranty before accepting it.
Some experts might even recommend purchasing an extended warranty from a different location than your dealership because it will most likely be cheaper.
Conclusion
Extended warranties are great options in case unexpected repairs are needed after the manufacturer's warranty expires. There are plenty of pros and cons for purchasing an extended warranty that you need to be aware of before making a final decision.
Extended warranties are known for their flexibility, customization, keeping your car longer, and preventing sudden repair costs. On the other hand, these warranties are not cheap, and you will not find everything covered, which can be a pain to many drivers.
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