These days, extended warranties are offered by both new and used car dealers. It seems like a responsible decision to get one but is it really? Visit us to find out more.
Car manufacturers offer warranty for their cars which include labor and repairs.
They come with some terms and conditions. Extended warranties are quite similar except they start when the warranty offered by the manufacturer ends. If for example, a new car comes with a 3-year warranty, an extended warranty may add 2 more years of coverage.
The repairs covered by the extended warranty may be different from the repairs offered in the standard warranty that comes with a new car.
Usually, they have some exclusions, requirements, and rules that OEM warranties do not have. To make things a bit more complicated, extended warranties have variations and a buyer may choose a coverage plan out of several. It is important to read the fine print and all the details for all the plans to ensure that you are getting what you need and avoid spending money on something you don’t. In some cases, these warranty plans can be canceled later, and a refund can be issued. The cost of the warranty may be included in the load. If it is canceled, the refund can be subtracted from the loan, reducing the number of payments but the value will remain the same.
For individuals that do not plan to keep the car after the original warranty offered by the manufacturers expires, it makes no sense to get an extended warranty.
It does make sense to get an extended warranty for a used car. The wisest decision is to take the time to read the coverage details. Some third-party offered warranties do not offer any value and can prove to be a waste of money. Also, not all extended warranties can be canceled later, and, in some cases, they can be voided if the car is not serviced correctly. Finally, like with the OEM warranty, scheduled maintenance such as oil and filter changes as well as other consumables are not covered by the extended warranty.