This question is inevitable when it comes to buying a new car. Finance managers at dealerships never forget to mention extended warranty, because it’s the easiest way to increase the price for a car you’re ready to purchase.
Your Peace of Mind & Car’s Reliability
The reasoning is obvious: you don’t want to think about possible expenditures; you want to maintain the peace of mind. However, the possibility of the payoff is rather small if you look at the statistics.
For instance, Consumer Reports survey found that more than half of car buyers who bought extended warranty did not use it at all. And, on average, the lesser half who did use it paid far more for the extended warranty itself than the initial cost of repairs they received.
This is because modern cars are quite reliable mechanisms. Even if they have a factory defect, it will show up in the early years when a regular bumper to bumper warranty applies. And, of course, if you will damage your car, you shouldn’t rely on the warranty at all.
Look at it from the other side. You had purchased extended warranty in order to avoid disturbances, but the car never failed. You will feel cheated instead of maintaining peace of mind, won’t you?
2016 Hyundai Veloster Rally Edition. Hyundai is famous for unbelievably long warranty plans up to 10 years. © Hyundai Motor Company
Unnecessary Expense
As you can see, in general, extended warranty is just an unnecessary expense. It doesn’t mean it is not useful. Bad things happen. Engines fail. If you want to be absolutely sure in your vehicle, extended warranty might suit you. It is also justified if the car’s or manufacturer’s reliability is in question and you want exactly this particular car no matter what.
Things to Consider Before Buying a Coverage Plan
Don’t buy it under pressure. It is best if you decide to buy a coverage plan or not before going to a dealership because finance manager will surely raise the issue. Don’t forget you can buy it anytime after, although the cost may increase as the car ages.
Nobody forbids bargaining. You will be surprised how much you can save simply asking for a discount.
Compare prices. A dealership is not the only place where you can purchase an extended warranty. You may find better offers from insurance companies or auto clubs, for instance.
