Are Extended Warranties Worth It?
There are many new and used vehicles for sale at Holiday Automotive from all of your favorite automotive brands. If you’re purchasing one of our used vehicles, especially, you might wonder whether or not it’s a good idea to also get an extended vehicle warranty to protect yourself against future repair expenses. While there’s no one-size-fits-all answer to whether extended warranties are worth it, we’re happy to teach you more about extended warranties, how they work, and what they cover so you can figure out if one is right for your needs.
What is an Extended Vehicle Warranty?
An extended warranty is something typically offered when financing a new or used vehicle that offers coverage for certain maintenance tasks even after your factory warranty coverage has ended. While all extended warranties are different in their specific terms, the idea behind them all is the same: in the event that your major powertrain warranty has ended and a major repair is required, an extended warranty should help cover the cost to have that repaired.
What Else do Extended Warranties Cover?
Though extended warranty plans can differ between auto manufacturers and dealers, these types of warranties may include or have options for coverage that includes the following:
- Towing
- Roadside assistance
- And more!
Extended Warranties for New & Used Vehicles
Extended warranties are available to cover both new vehicles and used vehicles, but they work a little bit differently depending on the condition of the car you buy. Here are some tips to consider for both types of extended warranties to figure out if buying one is a good idea for you:
New Vehicles
Consider these factors when deciding whether or not to buy a new vehicle extended warranty:
- Do you plan on swapping out your vehicle in the next 10 years? If so, then you may not need one, as vehicles are built to be more reliable than they were in the past.
- If you’re planning on keeping your vehicle for more than 10 years, then an extended warranty can definitely be worth the investment.
- It’s also worth checking to see what the insurance coverage is with your new vehicle purchase.
Used Vehicles
Consider these factors when deciding whether or not to buy a used vehicle extended warranty:
- Have the vehicle inspected and an estimate created for any vehicle issues.
- Decide how long you plan on keeping the vehicle.
- Think about the reliability ratings for the particular vehicle you’ve decided to buy. Does it break down more than average? Less than average? This can be an especially important factor in weighing whether or not an extended warranty is worth it. Just keep in mind that all used cars involve some risk of repairs down the road.
Do I Need an Extended Warranty?
Extended warranties are never a necessary thing in the sense that it’s always a choice whether you purchase one or not. Still, in considering whether you need an extended warranty to cover potential future vehicle repairs, think about things like:
- How much the warranty will cost upfront and whether or not you can pay it off along with your monthly car payments
- How much average vehicle repairs for your model generally cost vs. the cost of the warranty
- How much you have in an emergency fund to pay off future car repairs, if anything
- The potential devastating impact future repairs could have on your financial health or credit without an extended warranty and/or the impact not being able to repair your vehicle will have on your freedom and mobility vs. the peace of mind and certainty offered by paying extra for a warranty
Discuss All of Your Financing Options at Holiday Automotive
Ready to see how much your next vehicle could cost you at Holiday Automotive? We’re happy to provide you with tools to make that happen, including our online car payment calculator! Not sure you want to pay extra for an extended warranty? Consider the merits of leasing vs. buying. While you may not own a leased vehicle, many Beaver Dam and Oshkosh drivers choose to lease used or new vehicles because they prefer to drive a car for a few years that’s trouble-free while maintenance is still mostly covered by the factory new vehicle limited warranty.