Is an Extended Car Warranty Something You Need?
No car is built perfectly. If they were, every car ever made would still be on the road. Cars break down. Accidents happen and unexpected damage will occur. There’s really no way to stop this. However, there’s ways to protect yourself from these incidents. No one wants to end up having to make repairs costing thousands of dollars.
In order to help avoid these kinds of situations, many people will turn to extended warranties for their cars. These warranties either cover all repairs, or specific aspects of the vehicle. Drivetrain extended warranties are a common specific warranty. Extended car warranties aren’t for everyone. However, there are several benefits to considering one.
What is an Extended Car Warranty?
When you buy a car, it will automatically come with a standard warranty. These warranties can last anywhere from 2 to 5 years usually. They will cover a certain amount of repair to the vehicle. These are factory warranties which come with the new car.
An extended warranty is purchased in addition to the standard warranty. It’s added on to the end of the warranty. There are two different kinds of extended warranties. The first comes from the carmaker. These are called OEM (original equipment manufacturer) warranties. They are available for an increase in the price of the car. Typically they are bought at the time of purchase of the vehicle. Sometimes they can be purchased later in a vehicles lifespan, usually specifically right at the end of the original warranty.
The second type of extended warranty comes from a third party. These are usually pretty similar to the OEM warranties, but often have very specific clauses or events they may not cover. In addition, these warranties can require you to only repair your vehicle in authorized places. Repairs elsewhere will be out of pocket.
What Does an Extended Warranty Cover?
The type of warranty you get can cover very different things. The most common type of warranty that people want are bumper to bumper warranties. These warranties basically cover everything that might be relevant or break down in a car. Bumper to bumper warranties are convenient, but often expensive.
Other extended warranties will often cover the exact same aspects that the original warranty did. So if it’s extending a powertrain warranty, it will only cover the powertrain. These are especially common for people who get OEM extended warranties.
Benefits of an Extended Car Warranty
Extended warranties are not for everyone. People leasing a car certainly don’t need an extended warranty when they first get the vehicle. They may choose one if they decide to buy the vehicle outright at the end of the lease however. There are many benefits to an extended car warranty:
- Save Money - This benefit is common, but not guaranteed. But often, by spending some money during the duration of car payments, a lot can be saved in repairs later.
- Extend Car Ownership - For people who don’t want to keep getting a different car, this can often let you keep one you love for a longer period of time.
- Feel Secure - There’s a secure feeling that goes along with a warranty. You can drive in comfort and not feel stress or worry that an accident could result in crippling financial pain.
- Potential Cancellation - Many states can allow you to cancel your warranty later after you have purchased it. This means that in those states, you get back an amount equivalent to the time remaining. This means you don’t pay for unused warranty.