Is an extended warranty for your car worth it? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial choices by offering interactive financial calculators and tools as well as publishing objective and original content. This allows users to conduct research and compare information for free and help you make sound financial decisions. Bankrate has partnerships with issuers including, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The deals that are displayed on this website are provided by companies that pay us. This compensation can affect the way and when products are listed on this site, including, for example, the order in which they may be listed within the categories of listing, except where prohibited by law. Our mortgage, home equity and other products for home loans. But this compensation does have no impact on the content we publish or the reviews that appear on this website. We do not include the universe of companies or financial offers that may be open to you. Aaron Greene/Getty Images
3 minutes read. Published November 28, 2022
Jackie Lam Written Jackie Lam Written by Contributing writer Jackie Lam is a contributing writer for Bankrate. Jackie write about automobile loans. Written by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate from late 2021. They are dedicated to helping their readers gain the confidence to take control of their finances with clear, well-researched information that breaks down complicated issues into digestible chunks. The Bankrate guarantee
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So, this compensation can affect the way, location and in what order items are displayed within the categories of listing in the event that they are not permitted by law. We also offer mortgage home equity, mortgage and other home loan products. Other elements, such as our own rules for our website and whether the product is offered in your area or at your own personal credit score can also impact the way and place products are listed on this website. Although we try to offer the most diverse selection of products, Bankrate does not include details about every credit or financial service or product. A longer-term car warranty could help you avoid financial strain if your car requires unexpected repairs. But is an extended car warranty worth the cost? It’s all based on the specifics of the warranty as well as your needs. How much does an extended car warranty cost? When considering extended car warranties price is the primary factor. Extended warranties are priced differently in a range of $0 to $1000 per year. The price tag hinges on a variety of variables like: The provider. What is covered in the warranty you have. The model, make and year of your car. The mileage of your car. The location you live in and how much you travel. The cost of replacing parts and labor. Discounts you can claim. Other elements that affect the cost of an extended warranty include the length that you are covered, as well as the amount of coverage, and the deductible. The higher your deductible, the less the coverage’s cost. On the other hand, the lower your deductible, higher the cost. Keep in mind that if you are paying for the extended warranty using an auto loan it will mean that you are paying for not just the warranty, but also interest on the amount. What will an extended warranty include? An extended warranty on your vehicle generally covers unplanned costly repairs that affect the key systems of the vehicle, including heating/air, the engine and brakes. The exact coverage you receive will depend on the warranty you purchase that may cover labor, parts or both. Certain extended warranties include insurance for roadside assistance, tires , and any other costs related to the vehicle that you could experience. Extended car warranty drawbacks While the extended warranty of your car could potentially help you save on the cost of expensive repairs however, let’s look at the negatives that might come with getting one. Some repairs are not covered. because an extended warranty generally matches the brand warranty of the new vehicle, but it also mirrors the limits such as mileage and the repairs that are covered. Check the fine print as well as the exclusions list to determine if the coverage offered is worth the price. There’s a limit on time. car warranties are only good for the period in the extension of warranty. In other words, it could extend the original warranty by 2-years and 24,000 miles. If you started with the warranty being 3-years and 36,000 miles. That means the total warranty lasts 5 years with 60,000 miles. You might not use it If you did decide to take on an extended warranty only 45 percent ended up tapping onto their warranty extension, as per a . The remaining 55 percent didn’t. People who bought one and used it experienced a net loss of more than $375. It’s possible that you don’t need it in the first place. Check the track record of the vehicle you’d like to purchase by doing your own research, which includes reading reviews of cars as suggested by Renee Valdes, senior advice editor at Kelley Blue Book. “If the car is marketed as having a look at it carefully before signing to extend the warranty,” says Valdes. The money can be put toward instead. Emergency savings can be used to pay for any repair on a car that is not covered under the extended warranty — with no time limit. When it makes sense to buy an extended vehicle warranty. An extended car warranty is only useful in very specific circumstances. Extended warranties might work well for luxury car buyers who plan to drive their vehicles for a long time beyond the bumper-to bumper and powertrain warranties, Valdes adds. “There’s nothing more frustrating than being stuck with a big bill for a broken item in your luxurious vehicle, especially when there’s no guarantee to cover the item,” says Valdes. If you’re and the manufacturer’s warranty is over then it could be beneficial to sign on an extended car warranty. Warranty information from the manufacturer can be found on the label on the vehicle’s window. If you are able to purchase a warrantee it will help you pay for covered repairs. It’s beneficial to find out what the costs is covered in the initial few years after purchasing. And to reduce instances of costly repairs, stay on top of your car’s upkeep. “It’s always best to keep up with car maintenance so your overall repair costs remain low over the period you own your car,” says Valdes. The bottom line: An extended warranty for your vehicle isn’t for all. To see if an extended warranty is worth it make sure you do your research and get some quotes. Find out what repairs your vehicle may require in the coming years and check to see if you’re covered by a specific warranty.
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Written by Contributing writer Jackie Lam is a contributing writer for Bankrate. Jackie writes about auto loans. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since the end of 2021. They are enthusiastic about helping readers gain the confidence to manage their finances with clear, well-researched information that breaks down complex topics into manageable bites.
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