You must be wondering, “Should I buy an extended car warranty on a used car?” The answer is contingent on your vehicle and personal preferences. The over 18 billion dollars spent on extended car warranties in the United States in 2019, according to IBIS World, must be worth it for some people. In this post, we’ll go over some of the most frequent situational and lifestyle aspects to consider when considering whether or not an extended warranty is suitable for your used automobile.
How do extended auto warranties for secondhand cars work?
When it comes to purchasing an extended car warranty for a used automobile, there are numerous tools available to help you make an informed selection. Getting an extended warranty may save you money if you’re looking for a car that won’t be reliable in the long term.
The J.D. Power Vehicle Dependability Study or Predicted Reliability rating will help you determine which automobiles will cost more to own as they get older.
You can also check out online user forums and reviews. While angry business owners often use them to vent, they are also useful for observing trends. For example, there’s probably a design or manufacturing flaw if everyone talks about transmission failures at 60,000 miles.
A pre-purchase inspection provided by an independent mechanic can also provide information about a used car’s future reliability. They’ll note any existing difficulties with the vehicle and any flaws that they believe will cost you money in the future.
Should I buy an extended car warranty on a used car?
Whether or not you should acquire an extended warranty on a secondhand automobile depends on personal preference and financial constraints. Some drivers prefer to pay for auto repairs as they occur, while others may not be able to afford such out-of-pocket payments. An extended warranty on a used automobile is worthwhile because you can pay for it over time with small monthly installments.
You may spend more money on the extended warranty than on auto repairs if your automobile has no severe problems. An extended warranty on a used car, on the other hand, might provide significant peace of mind to the owner. We’ll explain why an extended warranty could or might not be worth it for you.
Advantages of buying an extended car warranty on a used car
Let’s dive into the advantages of buying an extended car warranty on a used car.
If you like your used car and want to keep it for a long time, an extended warranty can help you do so by covering repair costs that might otherwise tempt you to sell it. You can lock in a cheap rate if you get an extended warranty as soon as possible.
With an extended warranty, you may expect to pay nothing more than the cost of the coverage minus your deductible to keep your car on the road. A warranty serves as a form of car insurance in this approach, shielding you from potentially crippling repair costs. Extended warranties on used automobiles are worth the extra money for some car owners to have peace of mind. Extended warranties may alleviate financial stress for people who possess models from questionable brands. Dealerships, auto clubs, and insurance firms all sell them (which is sometimes call them mechanical breakdown insurance)
- Not having to pay for expensive repairs.
It’s always possible that your car will require an expensive repair. As your car ages, the odds of a breakdown grow. If you can’t afford to pay a $1,000 or $2,000 repair bill out of cash, an excellent used car extended warranty provider will cover the costs, less a small deductible. The cost of towing your car to be repaired, facility and roadside assistance, and rental car reimbursement are usually covered by extended warranties.
- If you’re searching for a used car, this is an excellent option to consider
Vehicle service contracts, sometimes known as extended warranties, are popular among used car buyers.
The average cost of extended warranty on used cars
The appropriate response will be different for each individual. The warranty cost is determined by the type of driver and vehicle that is applying for the warranty coverage. An extended warranty for a used automobile often costs $350-$700 each year. However, every individual and policy is different, as with all warranties. Here are a few elements that influence the average cost of extended warranty on used cars:
- Typically, cars with a higher age or mileage will have a more significant price tag. However, this is not always the case. It is dependent on the particular vehicle in question.
- A BMW will almost certainly be more expensive than a Chevrolet because of the type of vehicle. An excellent way to think about it is that the higher the vehicle’s value, the higher the value of the insurance coverage.
- The deductible amount is essential since a lesser deductible will result in a higher cost for an extended warranty for used cars. On the other hand, a greater deductible will result in a reduced cost for an extended warranty for used cars.
Guidelines to Choose an Extended Warranty for used cars
When it comes to extended warranties for used automobiles, there are so many possibilities that shopping for one might be confusing. Follow these rules to ensure that you have the best available coverage at the best possible price.
- Exactly how much protection are you looking to have?
Think about what kind of warranty you prefer, whether a comprehensive bumper-to-bumper guarantee or a more basic powertrain warranty.
Find out if you’re covered for repairs, labor, and even the cost of a rental car. Extended warranties for used cars should cover all of these costs, which can quickly accumulate.
- kind of car you have
Those who know their car is one of the most reliable may need a more streamlined strategy, especially when they aren’t planning on keeping the vehicle for an extended period.
- What’s the age and mileage of your vehicle?
Both of these aspects impact the prices charged by the finest used car extended warranty providers. Car insurance policies should also be affected by these factors.
- What is the history of your vehicle?
A bumper-to-bumper insurance policy may be warranted if you have a history of brake pad or drivetrain problems. A powertrain plan with a clean history and recent replacements of worn-and-tear parts may be more compelling.
What should you think about it?
The most effective coverage options for those driving used automobiles are usually those with less than 80,000 miles. According to the club, used-vehicle purchasers should consider how long they expect to retain the car, how many miles they drive each year, and whether they can afford to pay for repairs themselves. The average claim with AAA is $850.
Car buyers, understandably, devote most of their effort to determining which vehicle to purchase and how much to pay for it. Few customers take the time to investigate the add-ons available to them in the dealership’s financing office. If you don’t know which add-ons are worth it and which ones to avoid, a lack of preparedness can cost you thousands of dollars.
Almost invariably, buyers will be offered an extended warranty of some type. Extended service contracts, extended warranties, mechanical breakdown insurance, service agreements, and vehicle protection plans are used to describe them. After the manufacturer’s warranty expires, most companies pledge to cover unforeseen repairs.
If you mind getting an extended car warranty, make sure you buy from a reputable firm, such as an automaker, and read the fine print. Extended warranties frequently come with restrictions, including what’s covered and where the car can be serviced.
What are the factors that make extended warranties a waste of money?
Extending warranties is virtually never a good idea. Products don’t suddenly stop working, and when they do, the cost of repairs is usually less than that of an extended warranty. Extended warranties have undoubtedly helped some people save a significant amount of money.
Is it possible to cancel a warranty that has been extended?
You can cancel an extended car warranty at any time and get a prorated refund for the unused portion of the coverage. If the warranty were included in money from your loan, your monthly payment would not change, but if the refund is applied to your debt, you may be able to pay off the car sooner.
Is there a warranty extension for the alternator?
An extended warranty covers which parts of the vehicle? Depending on the coverage, an extended car warranty may or may not cover certain items. The powertrain (engine, transmission, and so on), air conditioning, alternator, gaskets and seals, electrical components, safety restraints, and other components may be included.
Is it feasible to get a more extended warranty later on?
An extended vehicle warranty can be obtained, though waiting until the original manufacturer coverage has expired usually means paying a higher price. The optimum time to buy likely is when the initial warranty period has expired.