Extended Car Warranties Are They Worth It – It’s an age-old question for car buyers: Is getting an extended warranty worth it? Get a direct answer once and for all.
The debate rages on whether an extended warranty for a used or new car is worth the money. While detractors point out that this is an additional expense, car owners who have a little extra cash for major repairs argue that it has saved them thousands. So, whether you want peace of mind or extra protection, an extended warranty may be the perfect fit for you. Here’s what you need to know when deciding.
Extended Car Warranties Are They Worth It
Understanding the cost of common repairs can help you decide if an extended warranty is a good idea. While the model and type of vehicle you have will greatly influence the price of repairs, the bottom line is that repairs are almost inevitable on any vehicle.
Is Getting An Extended Warranty On Your Car Worth The Money?
Here’s an example of typical repair costs for two best-selling models: the Mercedes-Benz GLC 300 and Toyota Camry:
Any way you slice it, repairs don’t come cheap. It should also be noted that today’s vehicles with electronic systems are better candidates for extended warranties because they tend to break down and can be expensive to repair.
Also known as a vehicle service contract, an extended warranty provides protection against unforeseen or unexpected costs. It may seem like a marketing gimmick, but an extended warranty has value if you don’t have the budget for expensive repairs down the line.
There are two types of extended warranties: a manufacturer’s warranty (also known as a factory warranty), which usually comes with the vehicle but can also be purchased, and a third-party or comprehensive warranty purchased as an aftermarket product.
Extended Car Warranty Cost: Guide October 2023
Manufacturer’s warranties are included in the vehicle purchase price of a new vehicle or certified pre-owned car, paying you nothing out of pocket. Provided by the vehicle manufacturer, these warranties are either a powertrain warranty or a bumper-to-bumper warranty. These warranties usually come with a length, often stated in years or kilometers (5-year, 100,000-kilometer comprehensive or powertrain warranty, for example).
The powertrain warranty covers any mechanical defects as a result of the manufacturing process. This includes the engine, transmission, and driveshaft.
Sometimes referred to as a limited warranty, a comprehensive warranty covers other parts of your vehicle other than the powertrain. Examples of what is covered may include:
That said, the bumper-to-bumper warranty does not cover items that suffer normal wear and tear from driving or use. Here are some things that are not covered:
Extended Auto Warranties: 5 Questions To Ask Before You Say ‘yes’
An aftermarket extended warranty, or third-party warranty, is one that you can purchase to extend your coverage after the automaker’s warranty expires.
If you want the peace of mind of full coverage for your vehicle after the original warranty expires, a third-party warranty is an ideal choice. But you should also do some in-depth research and do some critical thinking in this process. Below, we look at when you should consider an extended car warranty.
Purchasing an extended warranty is beneficial for several reasons, but not everyone will find it beneficial. By assessing your current needs and some other factors, you can make a good decision if this is the right choice for you.
One of the main reasons to buy an extended warranty is if there isn’t much manufacturer’s warranty left on the car you’re buying. You should also check the internet for reviews of the car model you want to buy. If you consistently find that the transmission fails or the car has other issues just after the 60,000-kilometer range, an extended warranty makes sense.
The Truth About Extended Car Warranties
Keep in mind that repairability can increase over the life of a vehicle. At around 100,000 km, the repair range increases significantly. That’s when an extended warranty gains value. Mechanical parts begin to break down, and the likelihood that you will need repairs increases. As a result, an extended warranty can cover these repairs so you don’t have to pay out of pocket.
In other cases, the manufacturer’s warranty may not extend to the model you purchased. While Kia, Hyundai, and Mitsubishi boast some of the best warranties available, they don’t extend to the next owner, unless they’re certified pre-owned. This is a prime example of when an extended warranty would make sense.
In addition, extended warranties on used cars can help alleviate some of the stress of potential repairs. If you don’t have the financial means to shell out thousands of dollars for repairs, an extended warranty can provide a worry-free alternative to an automotive emergency fund.
Not all warranty providers are created equal. Some have high regard while others have poor business practices. It is up to you to do proper research and read reviews to find the best option and best price available. Once you’ve settled on a provider, your due diligence shouldn’t stop there. Be sure to consider the following factors before you get an extended warranty.
Are Extended Car Warranties Worth It In 2023?
When considering an extended warranty, two of the main aspects are maintenance costs and length of ownership. On average, you can expect to pay around $1,500 in maintenance for every 20,000 km you drive, which usually occurs in one year of driving. (This price includes a back-loaded amount, since you probably won’t pay this much within the first 20,000 km of vehicle ownership.) Using this average cost, you can estimate if how much you will pay in maintenance over the life of the car and weigh it against the cost of the extended warranty. You may just find that an extended warranty saves you money in the long run.
Another consideration when you purchase an extended warranty is whether you will pay for it up front or include the costs in your loan. If you decide to pay upfront, expect to budget somewhere between $1,000 to $3,000. If that’s not an affordable option, you can often roll the price into debt.
If you decide to purchase a Clutch Protection Plan, you won’t have to deal with any guesswork. While other dealers may make you haggle on price, we offer a straightforward approach so you can avoid the stress and common issues associated with an extended warranty.
Although extended warranty companies throw around phrases like “comprehensive coverage” or “full coverage,” this isn’t always the case. Often, covered repairs are limited to the fine print within the contract.
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While it may cover mechanical breakdowns and other big-ticket items, it won’t cover routine maintenance like tire rotations or oil changes. To save yourself from future surprises, be sure to read every sentence of the fine print to see what your warranty covers.
You’ll also want to see what the policy’s deductible is and the company’s reimbursement method. Low-dollar or zero-dollar deductibles are more expensive than higher deductibles.
As far as reimbursement goes, you may find that the company pays the repair shop directly. However, some companies will only pay you for the repair cost after they receive the invoice or receipt. In rare cases, some extended warranty customers say it takes a long time for reimbursement (sometimes weeks or months), putting them in a financial bind and causing them to chase payments. .
Do you have a trusted mechanic? Before you buy an extended warranty, make sure you can take your car to them. Some extended warranty plans state that you can only take your vehicle to repair facilities on their list. While these repair shops may be reputable, you still don’t have the peace of mind or confidence you might have with your preferred mechanic in terms of pricing or quality of work.
Common Misconceptions About Extended Car Warranties
An extended warranty can cost a lot of money, so you might think it’s not worth it if you don’t use it. But in reality, a large portion of people use their extended warranty to get out of expensive situations. That said, be wary of traditional dealers who negotiate warranty prices. This probably means they mark it up a bit and charge different people different markups.
Conducting research and due diligence on an extended warranty for your vehicle is important. This helps you weed out the unreliable providers to find the perfect warranty company to work with. But if all of this seems overwhelming, don’t stress. Just go with the Clutch Protection Plan worry free.
You can also add a protective undercoat to ensure that every part of your vehicle from wheel to wheel and top to bottom is covered. While our vehicles undergo a 210-point inspection and come with a 90-day, 6,000-kilometer warranty, the Clutch Protection Plan adds the extra peace of mind you deserve. So, the only thing you need to worry about is choosing the perfect used car to suit your needs.
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Are Extended Car Warranties Worth It?
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