Many new car buyers are still unfamiliar with the purpose of an extended warranty. It may be an extra cost, but it is worth it. This type of coverage is not a requirement. It is a choice. Having it is like having a shoulder to lean on if something untoward happens to your vehicle. You can even choose how much coverage you want for your car.
Deciding to get an extended car warranty is helpful if you do not have a budget large enough to handle unexpected car repairs. This can give you peace of mind when you use your newly purchased car. Using an extended warranty means you may need to bring your car to an authorized car repair center. You may need to pay for the work and then get your reimbursement later.
The Coverage
An extended car warranty is like an insurance policy. The coverage you get depends on the type of coverage you select for your car. This type of warranty will not cover damage from wear and tear. It may include the major mechanical parts of the car. Extended car warranty can also provide 24/7 roadside assistance, tire protection, and trip interruption service.
Types of Extended Warranties
Manufacturers’ warranties can provide basic warranties with most certified used cars and most new cars. These warranties cover major systems and parts that break down. Defects in the pre-installed parts cause them to break down. Powertrain warranties provide coverage to any power component of the car.
Bumper-to-bumper warranties are also under manufacturer’s warranties. These can give comprehensive coverage for all of the vehicle’s systems and parts. They can cover wear and tear as well as routine maintenance. Free repairs from the car manufacturer come from secret car warranties. These are called technical service bulletins (TSBs) or silent recalls.
Third-party companies and dealerships offer aftermarket warranties. Extended warranties are similar to a manufacturer’s warranty. They have certain rules and exclusions in their coverage. Corrosion warranties cover any damage from rust.
Adjustment warranties cover specific car repairs. These warranties span the first few weeks or months of the car’s purchase. Wrap warranties are aftermarket warranties capable of supplementing a powertrain warranty. These can give you bumper-to-bumper coverage.
The Alternatives
A manufacturer’s warranty can only cover the major defects within a window of about 36,000 miles of travel or three years of ownership. One alternative to an extended warranty is by adding mechanical breakdown insurance to your current car insurance policy. It often covers the brakes, drive train, power system, transmission, and exhaust. This additional coverage will not cover your car’s wear and tear.
Opening a car care savings accounts for anything your car needs is a good way to prepare for anything your car may need. Putting away about $45-$50 each month for unexpected auto repairs is a good way to care for your car without breaking your budget. This is a win-win. The money will stay in your savings account in case you do not use it.
Using the Claims
Taking your car to a repair facility will allow you to get a professional assessment of your vehicle. Roadside assistance can handle your car’s transport to the facility if your extended warranty has this coverage. Some warranties allow you to choose any local mechanic, repair chain, or dealer for car repairs. Others have a prepared list of repair centers. These centers will only accept the claim if you go to any one of their repair centers.
A mechanic will determine the problem. Then, the mechanic will contact the service contract administrator before any work begins. Repairs will start once the administrator approves the repairs. Some cases need an adjuster to look at the vehicle first before any repairs happen.
Purchasing an Extended Car Warranty
The most ideal way to purchase an extended warranty is by paying it in full. Is there a more affordable way to get this coverage? You can also pick payment plans of up to two years after making a small down payment. More experienced companies accept debit and credit card payments.
Is it possible to cancel the warranty? This is allowable in some states after you purchase it. By then, you will receive a prorated refund. Deducting the principal amount will be possible if the auto loan includes it. This will decrease the number of payments for the loan.
A car salesperson may tell you to purchase an extended warranty before closing the car purchase. Some would even insist on it, but you do not need to be pressured at all. Buying a new car does not mean you should get an extended warranty right away. You can get it anytime until the manufacturer’s warranty expires.
Other Things You Must Know
Is it worth it to purchase an extended warranty the moment you get a new car? The manufacturer’s policy will still cover your new car until it expires. You do not need an extended warranty while the manufacturer’s warranty is still in effect. Using this will need you to pay a deductible and the rest of the bill.
There is a sunk cost if the car owner does not use the extended warranty. If you do use it, some warranty companies will not let you use your own trusted mechanic. You would have to settle with the mechanic of the approved shop to fix your car. The providers may choose to deny coverage from wear and tear. They may also reduce the claim payout.
Having an Extended Car Warranty Is Like Having a Security Blanket
The stress of having a broken-down car in time for a gathering two states away can be unbearable. Worrying about your budget for the stay away from home can take away the joy out of the trip. Having an extended car warranty can ease your mind a little. Even if you still need to pay, the amount will not be as draining as the full price of the repairs. You have peace of mind with the warranty policy as your security blanket.