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When to Buy An Extended Auto Warranty Plan

Wednesday, January 20th

When to Buy an Extended Auto Warranty Plan

New cars generally come with a warranty. Typically, that warranty will expire after a specified number of years or a specified number of miles, whichever comes first. An extended warranty is actually a service contract that helps cover the cost of repairs after the manufacturer's warranty expires. Purchasing one or not purchasing is strictly up to the buyer. When to purchase an extended warranty is also up to the buyer. You can purchase an auto extended warranty at any time.

One option is to purchase an extended warranty when purchasing the car. This offers a couple of advantages. First, it gives you negotiating power to ask for a lower price on the cost of the extended warranty. After all, the dealer wants to sell the car and will make more profit from the sale of the car than from the sale of the extended warranty. Chances are, if he has to come down on the price of the extended warranty in order to sell the car, he will. Other advantages include being able to roll the cost of the extended warranty into the financing for the car and spreading the payments out over time rather than paying for the extended warranty in one lump sum.

Extended warranties do not have to be purchased with the car. In fact, since an extended warranty is a service contract, it can be purchased either during the life of your manufacturer's warranty or after that warranty has expired. Be aware though that you may end up paying more for an extended warranty if you do wait until the manufacturer's warranty expires.

These warranties can be purchased through a variety of companies. Both manufacturers and third-party dealers sell extended auto warranties.

Before making the decision on when to buy an extended warranty, go online and research what your options are. Price and coverage will vary depending on a variety of factors. Duration of the warranty, extent of covers and warranty dealer will all affect price. Make sure you compare the duration, coverage and price of any warranties you are interested in purchasing.

Be sure to also read any fine print before purchasing and look for other differences between policies which may affect price. For instance, look for differences in deductible amounts, whether there are limits on where you can get the car fixed and whether the warranty is transferable to a new owner if you sell the car before the warranty expires.

Purchasing an extended warranty can be a smart investment on a new or a used car. Be sure to go online and do your research before purchasing an extended warranty so you get the best deal you can.

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Auto Warranty Plan FAQ

There are lots of companies offering warranty coverage for your car. They work very similarly to health insurance: you'll pay more for higher coverage, some things are covered and some aren't, and your policy will have a time limit. You can shop around for auto warranty plans just like insurance, too: you don't have to go with the plans offered at the dealership.
That depends on your car and your coverage. On a new vehicle, you might pay $25/month for bumper-to-bumper coverage, but an older vehicle's premium could be three times that. You can usually pay in full or monthly, with no difference in total cost.
The cost of your auto warranty will never be cheaper than when your car is new. But, you'll want to read the terms of your plan very carefully. While warranty plans at the dealership usually start from the time the manufacturer's warranty runs out, third-party plans often start from the date you purchase them. That could mean you're paying twice for the same coverage.
Probably. Each provider sets the limit for coverage, but there are options for cars with up to 250,000 miles! Most auto warranty plans are available for cars that are 20 years old or newer.
YES! The most important part of choosing an auto warranty plan is knowing what's covered and what isn't! Even comprehensive plans don't cover items with normal wear-and-tear, like brake pads and tires. The most user-friendly plans usually give you a list of what isn't covered - and if it's not on that list, it's covered!
Sometimes, but it's usually limited to the first 30 days after the purchase date. Again, be sure to read the terms of your auto warranty plan very carefully, to avoid any unpleasant surprises when you go to use your policy for the first time.
Almost all plans let you use the mechanic of your choice. Some providers will reduce your deductible if you go to one of their network partners.
Despite all of the annoying spam phone calls you've gotten, desperately trying to contact you about the expiring warranty on your car, auto warranty plans are a real thing. And, when you choose a plan from a reputable provider, you can save thousands of dollars on car repairs.
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