An extended warranty for car covers the costs of mechanical breakdown repairs that aren’t covered by your vehicle manufacturer’s original factory warranties. It’s available from third-party companies and some car manufacturers, but it’s important to shop around for the best prices and coverage options. The warranty can vary in length, what it covers and where the repairs can be done.
Some companies have a deductible that you’ll need to pay before the warranty kicks in. Others require that you use specific repair centers, and some have service requirements that prevent the most common problems from being covered. It’s also important to understand what parts are excluded from a warranty because they can add up quickly and reduce the value of the contract.
The main reason people purchase extended auto warranties is to avoid having a big repair bill come due after their car is out of warranty, and it may be worth the added peace of mind. However, if you can’t afford to pay for a major breakdown, it might be better to skip the warranty and build an emergency fund instead.
If you decide an extended warranty is right for you, be sure to read the fine print and ask questions before purchasing one. Also, make sure to get quotes from multiple providers to compare prices and coverage. It’s also a good idea to look into whether the company offers a money-back guarantee or will transfer the plan to a new owner if you sell your car.
Can be rolled into your loan: When you buy the extended warranty at the dealership, you can typically roll the cost of the plan into your auto loan and pay it off over time. This can save you a cash outlay upfront but will require you to pay interest on the amount that you don’t use.
Coverage can be limited: Extended warranties rarely include wear and tear items like brake pads, windshield wipers or air filters. Also, they usually only cover components that break down from normal use and don’t cover damage from accidents or misuse.
You’ll also want to consider the warranty provider’s customer service reputation. Companies with a high satisfaction rating are more likely to provide helpful and knowledgeable representatives. You can find reviews on the internet, and you should also ask for references from friends and family who have purchased extended car warranties in the past.
Exclusionary warranties are the most comprehensive and typically provide the best value, but you’ll need to do some research to determine which is right for you. A company with a good track record and easy-to-use website can be a great place to start. For example, Olive offers a modern, user-friendly website that makes it easy to compare plans and see which ones match your specific needs. It also offers a money-back guarantee and a variety of customizable deductible options to fit your budget. Compare plans and get a free quote from Olive today!