If you have a new vehicle and are looking for ways to save on repairs and maintenance costs, an extended warranty on your new car might be worth the cost. But you should consider the cost, your risk tolerance and financial situation carefully before you agree to the offer. You should also read the contract closely to understand what is and is not covered by the policy you are purchasing.
There are several options when it comes to buying an extended warranty on a new car, including plans offered by the manufacturer and third-party providers. Typically, each plan offers drivers multiple coverage tiers to choose from, such as bumper-to-bumper and stated component. Some contracts also include prepaid maintenance and tire protection. Often, the higher-priced plans are more comprehensive than lower-priced ones.
You should compare the prices and coverage offered by different providers to make sure you are getting the best deal. In addition, you should consider whether you will be paying upfront or through monthly payments. Some extended warranty contracts require the payment to be made in full at the time of purchase, while others allow buyers to roll the initial cost into their overall financing and monthly payments.
Before you commit to any warranty, it’s important to consider how long you expect to own the vehicle and what conditions it will be driven in. If you are planning on selling the vehicle before it’s paid off, you may want to skip the warranty and save the money. You should also ask yourself if the vehicle has a history of problems that could lead to expensive repairs after the original factory warranty has expired. A Carfax report can help you assess the vehicle’s repair history, so you can make a better decision.
Some reputable consumer advocacy organizations, such as Consumer Reports, recommend that you avoid extended warranties at all. CR suggests that you can save yourself some money by skipping the warranty and setting aside your own emergency fund for car repairs. If you decide to pursue an extended warranty, it’s wise to shop around for the best price and the most comprehensive coverage.
The cost of an extended warranty on a new vehicle can add up, especially if you have to pay for it in the form of finance charges and deductibles. But it’s important to weigh the pros and cons of this coverage option before you buy, because a reliable car is essential for safety on the road.
New cars are more reliable than ever, and some manufacturers even offer their own extended warranties for their vehicles. But for most drivers, a warranty won’t pay for itself. For mainstream cars built by domestic and Japanese automakers, it might be more financially sound to stick with the original car warranty and set up an emergency fund for car repairs instead. extended warranty on new car