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Now you can listen to our blog post, “Buy an Extended Warranty For a New or Used Vehicle” while on the go.
Given the high cost of car repairs, having a warranty that covers these costs might give you peace of mind that you won’t be saddled with a slew of problems you shouldn’t have to deal with so soon after purchasing a new vehicle.
Manufacturers give limited warranties on fresh new automobile purchases because of this. However, these programmes are only for a limited term — often 2 to 5 years. You can get additional coverage in the form of an extended warranty if you need more.
However, what exactly is an extended warranty? Is it worthwhile to spend more money on them?
What Is An Extended Warranty?
An extended warranty is an insurance policy that protects your vehicle in the event that it is damaged or needs repairs that you did not expect to occur so soon. While there are a variety of warranty choices available, these extended warranties are designed to protect you against unexpected car problems for a set amount of time.
When you buy a new car, it comes with a factory guarantee that covers the first few years of the vehicle’s life or the first few thousand kilometres driven, whichever comes first. As long as the repairs are stated in the contract, this factory warranty will cover the cost of any necessary repairs.
However, because the duration of this coverage is limited, some people choose to acquire extended warranties for their automobiles in order to extend their coverage.
What Does an Extended Warranty Cover and What Doesn’t?
The type of coverage you obtain will be determined by how much more you’re ready to pay. Some extended warranties, for example, may only cover the cost of a breakdown. However, most policies will cover the following:
- Engine, transmission, and driveshaft warranty: Most basic extended warranties policies cover the engine, transmission, and driveshaft. Because certain components are more prone to failure, the guarantee that covers them is usually longer.
- Bumper-to-bumper coverage: A factory and extended warranties will cover almost everything from the front to the back of the car. The manufacturer’s warranty normally lasts 3 to 5 years. However, purchasing an extended warranty will prolong the coverage by another couple of years.
However, warranties frequently exclude items like tyres, brake pads, seat belts, lamps, radio systems, and concerns linked to normal wear and tear.
Types of Extended Warranties
You can purchase an extended warranty directly from the manufacturer or through a third party. An extended warranty from Honda or Mazda, for example, will come directly from the manufacturer and can only be purchased at specified dealerships.
You can also buy an extended warranty from a non-affiliated third-party company. These can be used to purchase both new and secondhand vehicles. When interacting with third parties, however, you must be cautious about who you contact in order to establish that the organisation is real and trustworthy before entering into a contract.
Are Extended Warranties Worth It?
Given the high cost of your new car, you may be thinking if purchasing an extended warranty is worthwhile, especially since you are already covered by the manufacturer’s warranty. Let’s go through some of the benefits and drawbacks before you decide whether to buy or not buy an extended warranty.
Advantages of an Extended Warranty
Customize the warranty to suit your needs: You can tailor the guarantee to meet your specific requirements. Companies that offer extended warranties offer a wider range of products and services, allowing customers to customise their plans to meet their specific needs. For example, if you want 24-hour roadside support, you may add it to your warranty to ensure that you get exactly what you want.
The cost of pricey repairs is covered by extended warranties: Vehicles these days are highly computerised, and repairing or replacing components can be exceedingly costly.
Payments and paperwork are handled by car dealerships: It can be time-consuming to deal with all of the paperwork and red tape involved in acquiring a warranty. This documentation, as well as any payments, will be handled for you if you purchase an extended warranty straight from the dealership.
The Drawbacks of an Extended Warranty
They are not cheap: Obviously, an extended warranty entails paying more after you’ve already paid for your vehicle. However, you might be able to negotiate a lower price for your extended warranty.
Some repairs are not covered: Extended warranties always have exclusions, so it’s in your best interest to study the tiny print to be sure you understand exactly what is and isn’t covered in your insurance.
The number of repair companies available is restricted: If and when your car needs to be fixed while it’s still under the extended warranty period, the mechanics available to do the work may be limited.
It’s possible that you’re paying for something you’ll never use: With an extended warranty, it’s feasible that you’ll be paying for something you’ll never use. However, this may be preferable to having to deal with the hassle of having to take your car in for repairs and dealing with insurance claims.
What About a Used Car Extended Warranty?
We’ve been discussing extended warranties for brand new autos up until now. However, are these warranties available for secondhand vehicles?
In general, an extended warranty on a secondhand automobile isn’t always a good idea. Warranty firms will research all types of vehicles and will be aware of which models are most likely to require repairs. They’ll also know how much specific repairs will cost, and they’ll be able to charge more than the repairs are worth.
As a result, you can end up paying a lot of money for an extended warranty that you don’t really need. This is why it’s crucial to know who you’re dealing with.
However, if the vehicle is not particularly reliable, an extended warranty on a secondhand automobile may be worthwhile. If that’s the case, make sure you have an ‘exclusion’ guarantee, which covers everything except things that are expressly excluded. You’ll get more extensive coverage as a result of this.
Additionally, check sure the cost of the extended warranty isn’t too high when compared to the cost of repairs that are most likely to occur. After all, you don’t want to pay more for the warranty than you would for repairs if you had to pay for them yourself.
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