Cash 1 Blog
Are Car Warranties Worth It?
There are lots of things to consider when buying a used car, and the potential needs for substantial repairs that can severely deplete your savings are some of these things worth considering. For many people, extended car warranties are the solutions to any unplanned and unwanted expenses that may come as a result of buying a used car. Also, the peace of mind extended warranties offer car owners can sometimes be worthwhile. However, are extended warranties worth the troubles and resources often dedicated to them by many car owners? This article seeks to address this question.
What Are Extended Car Warranties and How Do They Work?
Also referred to as service contracts, extended warranties for used cars can be seen as additional security provided to car owners to help them manage and minimize the risk associated with expensive repairs and other unforeseen expenses that are uncovered by the default factory warranty of the car. An extended warranty is often marketed by many car dealers as the best used car warranty due to the financial benefits it usually offers them. Although used car owners must be wary of the marketing tactics of the car dealers, they still have to be careful of the dangers of incurring substantial repair costs without having any form of coverage. Notably, new cars can also make use of extended car warranties which can come with different plans and duration. There are various forms of guarantees that car owners can be offered. Some of them are bumper-to-bumper packages that cover almost all areas while others have so many restrictions that limit what you are going to enjoy the plans.
What Do Extended Warranties Cover?
Since extended warranties for used cars vary from one plan to another, there is no single, satisfactory answer to this question. Therefore, if you are considering extended warranties, it is essential for you to get in touch with the company offering it to be sure of the what the warranties have in regards to cover deductibles and levels. While there are extended car warranties that cover several levels, many others are limited to specific standards.
Factors to Consider before Buying Extended Warranties
It is usually difficult to decide whether buying of extended warranties is worth it or not. Therefore, before purchasing an extended warranty for your used car, these are the things you need to put into consideration:
- Reliability of your vehicle
Some models and makes of cars are precisely known to be reliable; hence, they hardly break down or demand expensive repairs. If you have bought a reliable car, you may not need an extended used car warranty; but the reverse is the case if you have an unreliable car. For anyone looking for a car to buy, consider the reliability of the car. You can conduct a little research online to get a clear idea of the cars that are reliable and can help you avoid expensive repairs. Visit www.cars.com, www.edmunds.com or other websites offering similar services to have comprehensive reviews and ratings of the reliability of different cars.
- Third-party or manufacturer’s warranties
When searching for the best used car warranty, you have the option of choosing between third-party warranty and manufacturer’s warranty. From Mercedes-Benz to BMW, Volvo, Chevrolet, Toyota, Acura, and Honda, most of the car manufacturers offer different kinds of extended warranties for car owners, and you can equally pay for warranties from third parties. The major benefit of third-party warranty lies in the fact that it is usually more affordable than manufacturer’s warranty. Experiences have, however, shown that many third-party warranties are fraudulent. Therefore, it is crucial for you to review any third-party company you are considering to avoid falling victims of fraudulent activities. Manufacturer’s extended warranties for used cars do not require an upfront payment when you need a repair, and the repairs of the cars are usually done by seasoned, professional technicians who will only use authorized parts that will give you the best results. So what do you value most – the cost of repairs or the quality of repairs?
- Intended duration of using the car
Do you plan to use the car for a long time? Would you continue using the car after the expiration of the factory warranty? If yes, you should not overlook the essence of an extended warranty. When you use a car for an extended period, it becomes less reliable, and the factory warranty will also expire with time. Therefore, getting an extended warranty to cover you for any expensive repairs that you may encounter will be worthwhile in the long run.
Tips for Buying an Extended Warranty for Used Cars
In case you have probably decided to buy an extended warranty, these are the tips that can help you make a great decision and secure your investment in protecting your car and potential repairs:
Most of the choices people make under pressure often have adverse long-term effects; therefore, only buy coverage for your used car at your convenience. Do not allow dealers to talk you into buying what has been already covered by factory warranty; take your time to determine whether the warranty is worth it or not. If you are having difficulties deciding whether the coverage is worth it or not, you should get the opinion of an expert.
You are hardly going to get the best used car warranty from the dealership; therefore, take your time to shop around and consider the deals offered by different insurance companies and auto clubs. Even if you are buying from the dealership, do not forget to bargain for the best price. Some of the third-parties organizations offering extended warranties include USAA, Credit Unions, and car insurance companies. Meanwhile, just as in the case of buying from the dealerships, do not shy away from bargaining with these parties to negotiate the most affordable cost.
While you are shopping around the best deal, do not forget that each insurance company, auto club or dealership offers different plans that include different things; hence, it is vital for you to be certain of what a plan covers for paying for it. Apart from the coverage options, you should also pay attention to terms and conditions attached to any plans for extended car warranties.
- Only buy coverage at your convenience
- Shop in different places to get the best bargain
- Be sure of what is covered by the warranty
- Choose bumper-to-bumper coverage
Although you may be considering the price difference between bumper-to-bumper coverage that covers almost everything and limited coverage with various restrictions, a bumper-to-bumper coverage is usually worth more in the long run. A bumper-to-bumper coverage is more cost-efficient considering the multiple benefits it offers such as reimbursements for travel expenses and car towing.
How to Shop for CPOs
There are a few things you need to bear in mind when shopping for certified pre-owned car warranties. Foremost, like earlier stated, you must have a full understanding of what the warranties cover, bearing in mind the fact that these warranties differ significantly. Do not shy after from asking about the total amount of coverage you will get and the duration. These are the significant factors that must be duly considered before committing to any form of warranty. You should take a good look at the deductibles and get a full knowledge of how much the company is offering you the warranty charges. If you are planning to sell the car before the expiration of the CPO warranties, you should also inquire whether the extended car warranties are transferable or not as this can affect the sales value of the car.
You should also inquire whether roadside assistance will be part of the warranty on offer for the CPO warranty or not. It is equally important to consider whether the car can be leased. However, no guarantee is impeccable, and as such, there are always going to be a few things that will be missing in the deal; therefore, you should only consider the most important things when paying for extended warranties for used cars.
Finally, are extended warranties worth it? Which coverage offers the best-used car warranty? Simply put, there is no single, all-encompassing answer to these questions. However, the peace of mind and coverage provided by extended warranties will at least put you in better and safer position than owning and driving a car without any form of warranty. If paying a substantial amount of money for repairs or replacement of some parts of your car is affordable for you, you may not need buying an extended warranty for your vehicle.
Nevertheless, as earlier stated, there is no one-fits-all answer for every car owner; therefore, it is essential for you to consider the peculiarities of your car and situation, and decide whether having an extended warranty for your car will be worth it or not. Also, if you have problems deciding on whether to buy an extended warranty or not, consult your financial experts for professional advice.
Joseph Priebe takes pride in assisting audiences with his articles to help them make sound financial decisions.
With over ten years of experience writing financial content his goal at CASH 1 has always been creating engaging and easy-to-digest information for anyone searching for immediate or long-term monetary solutions.
When Joseph is not writing about personal finance, you can find him photographing the Southwest United States with his 4x5 Graflex Crown Graphic camera. He is based in Phoenix, Arizona.