There are a lot of choices when it comes to buying an extended warranty on a used car. You’ll often be offered a warranty by the dealership, but there are also plenty of independent providers offering warranties at different prices. It’s hard to make a decision, especially without understanding what each option offers. This article will help you make an informed choice about whether or not to buy a warranty and if so, what kind of warranty is right for your needs.
If you’re buying a used car, chances are that the manufacturer’s bumper-to-bumper warranty has already expired or is about to expire. An extended warranty can offer peace of mind and help you avoid the stress of a major repair bill that could leave you bankrupt. However, it’s important to consider your risk tolerance, lifestyle and budget before purchasing one of these warranties.
A reputable warranty provider will have transparent pricing, meaning that you can see exactly how much it will cost before you sign up for it. You’ll also want to make sure that the warranty has a good track record of paying out claims. You can find out about this by asking for a copy of the company’s history to be emailed to you.
It’s also a good idea to look at the terms of the warranty, including deductible options and other factors that might impact its costs. For example, some warranties have a deductible that you have to pay upfront for repairs before the warranty kicks in. This may increase the overall cost of the policy. Others have a set payment plan, where you’ll pay a certain amount each month and they will cover the rest of the expense.
You’ll also want to look at what kinds of repairs are covered and excluded from the warranty. Some warranties, called inclusion warranties, only cover specific parts of a vehicle. These tend to be more expensive than exclusion warranties. You should also consider how many miles you’ll drive per year, since a lot of warranties have yearly mileage restrictions.
Some warranty providers will also have a variety of payment options, such as allowing you to roll the cost of the MBI or VSC into your auto loan. This can be helpful if you’re worried about your ability to afford a repair, or if you’re considering financing the purchase of a new or used car.
If you’re a high-mileage driver or planning to sell your car before the warranty expires, an extended warranty can be worth the cost. You’ll also likely benefit from a warranty if your current car has been racking up frequent problems. Otherwise, you may be better off saving the money and putting that toward a down payment on your next car. It’s a big decision that only you can make, but careful consideration of your finances and risk tolerance is the key to making the right choice for your lifestyle. should i buy extended warranty on used car