A guide to purchasing a vehicle warranty or extended warranty, detailing the benefits, coverage options, factory inclusions, third-party options, and red flags to watch out for.
Purchasing a car, whether new or used, is one of the largest investments most of us make. You may choose to protect yourself and your investment by purchasing a warranty or extended warranty for your vehicle.
Some of the benefits of a warranty include:
- Financial peace of mind, as the warranty protects you against high repair costs.
- A rental car while your vehicle is being repaired (not always offered).
- Increased resale value, as most warranties are transferable.
- Different coverage options, which may include:
- Mechanical Breakdown: The most common warranty type, covering components that fail through no fault of the owner and beyond normal wear and tear.
- Wear and Tear: Typically more expensive, these warranties cover items affected by normal use—such as brakes wearing out at 40,000 miles or routine tire replacements. Some also cover routine maintenance and oil changes.
If you buy a new car from a dealer, it typically comes with a manufacturer warranty included in the price. These warranties are defined by both timeframe and mileage and expire when the first limit is reached, ranging anywhere from 12 months or 12,000 miles to 7 years or 70,000 miles depending on the manufacturer.
Purchasing a used car from a dealer can also net you a minimal warranty or the remaining original factory warranty, depending on the car's age and usage. Always ask the dealer what warranty, if any, is included in the purchase price.
If a warranty is not included at the time of purchase, you still have options. There are two common ways to purchase an extended warranty for your vehicle:
- Purchase from the dealer. Most dealers offer extended warranties during the finance, loan, and purchase discussion, allowing you to roll the cost into your loan's principal balance. Dealers often provide a limited timeframe allowing you to return and add extended coverage later if you change your mind.
- Purchase online from a third-party vendor. A quick web search will yield numerous companies offering extended vehicle warranties. Visit their sites and follow the steps to obtain a quote.
When making your purchase, watch out for these potential red flags:
- One of your quotes is abnormally lower than the others (if you obtained multiple quotes, which is recommended).
- The warranty seller is a dealership that requires all repair work to be done exclusively at their location.
- The exclusion list on the warranty includes both mechanical breakdown and wear-and-tear damages.
- The warranty company only accepts cash as a form of payment.
As always, before entering into any contract, ensure you fully understand all terms and conditions of your auto warranty. Ask questions prior to signing, as most contracts carry early termination penalties if you later decide you dislike the cost or requirements.
How to Buy an Auto Warranty
A guide to purchasing a vehicle warranty or extended warranty, detailing the benefits, coverage options, factory inclusions, third-party options, and red flags to watch out for.
Purchasing a car, whether new or used, is one of the largest investments most of us make. You may choose to protect yourself and your investment by purchasing a warranty or extended warranty for your vehicle.
Some of the benefits of a warranty include:
- Financial peace of mind, as the warranty protects you against high repair costs.
- A rental car while your vehicle is being repaired (not always offered).
- Increased resale value, as most warranties are transferable.
- Different coverage options, which may include:
- Mechanical Breakdown: The most common warranty type, covering components that fail through no fault of the owner and beyond normal wear and tear.
- Wear and Tear: Typically more expensive, these warranties cover items affected by normal use—such as brakes wearing out at 40,000 miles or routine tire replacements. Some also cover routine maintenance and oil changes.
If you buy a new car from a dealer, it typically comes with a manufacturer warranty included in the price. These warranties are defined by both timeframe and mileage and expire when the first limit is reached, ranging anywhere from 12 months or 12,000 miles to 7 years or 70,000 miles depending on the manufacturer.
Purchasing a used car from a dealer can also net you a minimal warranty or the remaining original factory warranty, depending on the car's age and usage. Always ask the dealer what warranty, if any, is included in the purchase price.
If a warranty is not included at the time of purchase, you still have options. There are two common ways to purchase an extended warranty for your vehicle:
- Purchase from the dealer. Most dealers offer extended warranties during the finance, loan, and purchase discussion, allowing you to roll the cost into your loan's principal balance. Dealers often provide a limited timeframe allowing you to return and add extended coverage later if you change your mind.
- Purchase online from a third-party vendor. A quick web search will yield numerous companies offering extended vehicle warranties. Visit their sites and follow the steps to obtain a quote.
When making your purchase, watch out for these potential red flags:
- One of your quotes is abnormally lower than the others (if you obtained multiple quotes, which is recommended).
- The warranty seller is a dealership that requires all repair work to be done exclusively at their location.
- The exclusion list on the warranty includes both mechanical breakdown and wear-and-tear damages.
- The warranty company only accepts cash as a form of payment.
As always, before entering into any contract, ensure you fully understand all terms and conditions of your auto warranty. Ask questions prior to signing, as most contracts carry early termination penalties if you later decide you dislike the cost or requirements.
How to Buy an Auto Warranty
By Howtodotips
A guide to purchasing a vehicle warranty or extended warranty, detailing the benefits, coverage options, factory inclusions, third-party options, and red flags to watch out for.