Having an extended warranty on your car can reduce financial stress, particularly if you drive a less reliable model or your original manufacturer’s warranty has expired. But before you sign on the dotted line, understand what the warranty covers and consider whether it’s right for you. These warranties are offered by dealerships, auto clubs and even some insurance companies (which sometimes call them mechanical breakdown insurance). The plans differ in length of coverage, what’s included and where you can have repairs done.
It’s important to shop around, as prices vary greatly, and plans may include limitations like deductibles, service requirements and depreciation clauses. In addition, it’s a good idea to find out the provider’s track record and if they’re a financially stable company that will be around in case you need to file a claim.
While a warranty isn’t a necessity, it can be a smart investment. Typically, these warranties cost between $200-$250 per month and can help cover expensive repairs that aren’t covered by your standard policy. If you are a commuter, an extended warranty can be worth the investment because you’re more likely to exceed your vehicle’s mileage limit and need to replace costly components.
A warranty can also cover routine maintenance, such as oil changes or tire rotations. It’s a good idea to check your car’s manual for specific maintenance recommendations, as not every issue will be covered. For example, a warranty won’t cover replacing a faulty fuel pump or air conditioning compressor that naturally wears out over time.
If you’re a new car buyer, it’s smart to purchase one while the car is still under its initial manufacturer warranty. This will help you get the most out of it. But if you have an older vehicle, it might not make sense to pay for an extended warranty, especially if you can afford to repair the car yourself or save up for a bigger repair bill in the future.
An extended warranty isn’t always necessary, and many people find it hard to balance a repair budget with other bills and expenses. But it can be a worthwhile investment if you want the peace of mind that comes with knowing you’ll have money to pay for a major repair bill in the future.
Candace Baker is a former WalletHub reporter who studied personal finance and automotive topics. She worked on car insurance and general automotive topics, producing educational content and answering readers’ questions. She graduated from The University of Texas at Austin with a bachelor’s degree in journalism. During her time at WalletHub, she wrote about the benefits and drawbacks of purchasing an extended warranty and what to look for in a good plan. She now works as a freelance writer and travels the country to research car-related topics for various media outlets. To learn more about her, you can visit her website. Her work has been featured on numerous online publications, including ThriftyNifty and The Stir. what does extended warranty cover on a car