The Pros and Cons of Extended Warranties

By

Automotive Editor

Rebecca Ballard is a freelance writer who specializes in the automotive industry. A unique interest in finding affordable and dependable automobiles keeps her busy researching the most up-to-date information in the automotive field.


, Automotive Editor - January 31, 2017

Making the investment in a new car requires patience and diligence. Automobile owners are keeping their cars for longer periods of time, so careful maintenance is even more important. Since most cars now have sophisticated electronics and complex technology, an extended warranty could save consumers hundreds if not thousands of dollars.

But extended warranties aren't cheap. So is it worth it? These are just a few of the pros and cons of purchasing an extended warranty for your new or used car.

Pro: Ease of Purchase

If you decide to buy an extended warranty from the dealership, you won’t have to worry about completing paperwork later on. Many dealers offer the extended warranty as part of the car buying experience. It will cost a little extra, but the dealership can take care of setting up the payments and you can usually get the vehicle repaired at the dealership where you bought your car.

Pro: Fit to Needs

Choosing the best extended warranty depends on what your original warranty already provides. Some warranties offer several years on a powertrain, but only a couple years for a bumper-to-bumper warranty. You can choose exactly what you need so you are not paying extra for services you won’t use.

Pro: Repair to Electronics

Today’s cars have more intricate technology and electronics than ever before. If you have owned a vehicle with electrical problems you understand how annoying it can be when the technology does not work correctly. Buying an extended warranty to cover these expenses will help keep the cost down and give you peace of mind.

Con: Use of Warranty

If you are lucky, your vehicle will never have any serious problems and you will never need to use the extended warranty. That means you spent several hundred dollars to purchase a warranty that you didn’t need. But, like health insurance, if there is a catastrophe, you will be glad to have the extra protection.

Con: Coverage of Repairs

Although you would think an extended warranty would cover every situation that could occur with your car, most include an exclusion list. These are systems and parts that will not be covered if something malfunctions in your vehicle. In addition to checking out the exclusion list, you need to make sure you have access to covered repair shops if you purchase a third-party warranty instead of an extended warranty from the dealer.

Expense of Warranty

The main reason people do not buy an extended warranty is because of the expense. When you are signing over a lot of cash to purchase a car, you may not want the additional cost of an extended warranty.

An extended warranty may be right for you. But if you choose one, be aware that extended warranties are a major profit center for the dealer. You can -- and should -- negotiate its price, just like the price of your car. You might be surprised what they are willing to offer to keep your business.

Learn more about car warranties here »

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, Automotive Editor

Rebecca Ballard is a freelance writer who specializes in the automotive industry. A unique interest in finding affordable and dependable automobiles keeps her busy researching the most up-to-date information in the automotive field.


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