When you buy a new car, the salesperson will likely offer you an extended warranty for your vehicle to protect you against accidents and damages that may occur outside the specifications of the manufacturer’s warranty. Seems like a no-brainer, right? Deciding whether or not to invest in an extended auto warranty can lead to costly repercussions down the line. Although a manufacturer defect or automobile accident has become relatively commonplace in today’s society, extended auto warranties are often marked up substantially, so purchasing one when not truly needed can leave a hole in your wallet.
Is Your Vehicle Reliable?
If your vehicle is known for being reliable and long-lasting, you might not need an extended warranty. Unfortunately, there aren’t every many automobiles known to magically last forever. Cheaper cars often last just as long as their more expensive counterparts, which makes the guesswork difficult in this situation. Even Consumer Reports most reliable cars of the year break down here and there. If you’re purchasing a used car, considering reliability is even more important. Always look into a car’s history to verify facts and search for any undisclosed problems.
How Long Do You Plan on Keeping Your Vehicle?
Image via Flickr by Hani Arif
If you buy a car and intend to sell it three or four years later, there’s probably no reason for you to buy an extended warranty. However, if you do plan on keeping the car for an “extended” period, then an “extended” warranty would be logical to invest in. Folks who can’t keep a car longer than they can keep a partner need not apply, but for those looking to drive their car into the next decade, an extended auto warranty is your best bet at saving money and keeping all four wheels turning.
Who is Driving the Vehicle?
Teen drivers usually need to make their cars last until they have graduated college or made a career for themselves otherwise. They’re also younger and more accident prone in their first year of driving, making them some of the best candidates for an extended auto warranty. If you are purchasing a car for your child, and you want the car to make it into the next chapter of their life, an extended auto warranty gives your teen some wiggle room to make a few mistakes before sacrificing their life’s savings to an auto body shop.
Can You Afford Repairs Later or a Warranty Now?
How is your current financial situation? Are you living paycheck to paycheck, or are you secure now but fearful of an uncertain future? These are all important things to consider before purchasing an extended auto warranty. Paying for repairs you can afford now but don’t need is more effective than not being able to pay for repairs that may happen later on. The key is to act when you can afford it, and practice caution when you cannot. Purchasing affordable insurance is also important. Some companies offer cheap insurance but, their coverage is lousy. Glassdoor.com reviewers suggest Assurant.
Buying an extended warranty for your vehicle might be a gamble. It’s important to deeply consider your situation before investing, but be aware that coverage is better than no coverage if you ever end up in an accident.