Every car owner prays they won’t experience a breakdown, but even the most reliable vehicle is bound to fail eventually. Statistics show that 33% of Americans don’t have the cash saved to cover repairs in an emergency to make things worse.
Designed to look out for a car and its parts once the factory warranty has expired, extended warranties (sometimes known as vehicle service contracts) are a total lifesaver for millions of drivers across the country. But if you don’t know precisely what one involves, you might not be sure if it’s worth your while.
Let’s take a look at what to expect and answer the question: “Should I buy an extended warranty on a used car?”
The Difference Between a Factory Warranty and an Extended Warranty
First, it’s a good idea to break down the differences between a factory warranty and an extended warranty.
Nearly every vehicle comes with a factory warranty when purchased brand new. What this warranty covers and how long for entirely depends on your manufacturer. The average factory warranty generally protects everything between your bumpers (except tires) against wear and tear for around three years or 36,000 miles (whichever comes first). Some manufacturers split their factory warranties into bumper-to-bumper and powertrain, with each having its unique terms.
If your used car isn’t very old, and its factory warranty was transferable, it may still be covered. Use this guide to help you check. If not, it’s time to consider an extended warranty. These can usually be purchased from your manufacturer as a direct extension of the original coverage or third-party provider.
Manufacturers are generally quite restrictive, but by opting for a third-party extended warranty, you can decide how much of your car you’d like to cover, how much you’d like to spend to do so, and whether you’d enjoy any additional perks. For these reasons, most auto experts recommend coverage from a third-party.
The Benefits of an Extended Warranty for Your Used Car
There are tons of great reasons why you should invest in an extended warranty, including:
You’ll Save on Repairs and Maintenance
The idea of an extended warranty is that you pay less for the coverage than you would for any repair work in the period. Even for a new car, the average annual cost of upkeep is around $1,186—and this only goes up the older a car gets.
With a good extended warranty by your side, you pay a flat fee upfront and nothing when the worst happens, potentially saving you thousands of dollars over the life of your vehicle. Depending on your warranty terms, it may include regular maintenance, too, keeping even more money in your pocket.
You’ll Get Extra Benefits
Some warranty providers add an impressive suite of perks to their packages. These can vary from 24/7 roadside assistance to replacement rental cars and even movie vouchers for you and your family. Make sure to do your research and find the best deal for you.
You’ll Enjoy Total Peace of Mind
While breaking down far from home is never a pleasant experience, when an extended warranty has your back, at least you don’t have to worry about it. If your coverage includes everything we mentioned above, a roadside assistance team will take your car to the nearest auto shop, and you’ll be back on the road in a rental car before you know it. Then, once your vehicle has been repaired, you can pick it up and drive it home without ever having to reach for your wallet. It’s a huge relief knowing that, whatever happens, someone’s looking out for you.
When an Extended Warranty Is Definitely Worth It
There are only two real instances an extended warranty isn’t worth it: when your car is still under factory warranty or when you’re overpaying for your policy. On the opposite side of the scale, when is an extended warranty for your used car worth it?
When Your Vehicle Is Hitting High Mileage
As cars get older and put more miles on the clock, their parts get closer to failure. This increases the chance of breakdown, and if you’re unlucky, it’ll happen when your miles from home. With comprehensive protection, you’ll be well prepared for the inevitable and end up paying less for the resulting repairs.
When It Doesn’t Just Cover Repair Costs
Having your repairs covered is excellent, but if you manage to bag yourself a policy that gives you even more for your money, it’s worth getting excited about. Every provider offers different benefits, so once you have a few quotes, lay them side by side and consider which is best for you.
When the Provider Is Willing to Work with You
As we mentioned previously, manufacturers and dealerships can be super restrictive with their warranty offering, generally only giving you the choice of one or two packages at a non-negotiable price. However, many third-party providers are more than willing to discuss your needs and budget, tailoring a warranty package specifically for you. This way, you get sufficient coverage at a manageable cost, making an extended warranty all the more worth it.
A Small Price to Pay for Peace of Mind
So, can you get a warranty on a used car? Yes. Should you get a warranty on a used car? Yes, especially if the original factory warranty is expiring.
While some people may feel a little uncomfortable parting with a lump sum upfront, focusing on how much money—and unnecessary stress—you’ll save your future self will remind you why you’re doing it. Don’t risk being stranded on the roadside. Do your research, consider your options, and invest in an extended warranty.