If you buy a brand new car from your local dealership, you will most likely receive a free warranty covering you from bumper to bumper.
But what happens when this warranty runs out? And what if you are buying a used car?
If you find yourself sitting in a broken vehicle after the warranty period, you will be required to pay for all the necessary repairs out of pocket, unless you purchase an extended auto warranty.
An extended auto warranty is an “aftermarket” warranty you can purchase to help aid in paying for both small and large car-related repairs.
Extended auto warranties are not sold by the dealership or auto manufacturer, but rather a private “for-profit” company that specializes in providing extended auto warranties.
Each and every plan is different, and the services and parts that are covered by the plan are different as well.
Are Extended Auto Warranties Worth It?
According to Consumer Reports, nearly 50% of all car buyers that decide to purchase an extended warranty will actually file a claim for car repairs while covered by their extended warranty.
In all, this means that purchasing an auto warranty can be a gamble.
If you get a major repair done while enrolled in an extended auto warranty, the warranty could pay for itself.
Common repairs such as a head gasket could cost upwards of $1,000 or more.
However, people can view warranties (often referred to as service contracts) differently. For instance, some individuals want to have a worry-free ownership experience, and the peace of mind is worth the cost of the extended auto warranty.
Buying an extended warranty is a matter of personal preference. Ask yourself the following questions below before choosing to purchase an auto warranty.
If you are leasing a car, there is no need to purchase an extended warranty, as the dealership is reponsible for covering the maintinance of the vehicles.
Is an Extended Car Warranty Worth It?
How Long Will You Keep Your Car?
If you are a frequent car buyer and tend to purchase a new car every 3-5 years, purchasing an extended car warranty may not be necessary.
Do you have an emergency fund you can dip into to pay for costly repairs such as an engine swap or transmission issue?
If so, you may not need an extended auto warranty. But if you are a frequent car buyer, having to dip into your funds to pay for a costly repair could set you back on your purchase date.
Is Your Car Reliable?
There is no question that some car makers and brands are much more reliable than others. All vehicles will require work and repairs at some point or another, but some will need much more work to maintain.
Do You Commute Frequently?
If you are used to putting on 20,000+ per year on your car due to a job or extra long commute, those miles will begin to take a toll on your vehicle. If you plan on driving your car and adding lots of miles, a car warranty may be for you.
Purchasing an Extended Auto Warranty
If you are tired of paying for repairs, an extended warranty could help you save thousands in unnecessary expenses. CrediReady is one of the nation’s leaders with extended auto warranties. If you are ready to be free from car repairs, take a moment to fill our no obligation warranty inquiry form here.
If you are in the market for a reliable car or are looking to replace your current car with something more reliable, you may be concerned about your credit score and its effect on your payments.
CrediReady offers one of the largest databases that connects dealerships, lenders, and buyers in all credit situations. Take a few moments to fill out our free and confidential loan search form online and we will match you with a dealership in your local area that can meet your auto financing needs.