What Do Extended Warranties Cover?
An extended warranty is like an insurance policy on your car — a safeguard against unforeseen repairs. You can purchase an extended warranty in addition to the manufacturer’s standard warranty to receive coverage for things like the exhaust, engine, air conditioning, heating, electrical systems, and regular usage wear. Depending on the terms, many plans will also cover filters, oil changes, brake pads, and filters. When you think about how often you change all of these, you can see where the value comes in! (And if you aren’t changing these often, you’re probably making at least one of the 10 Serious Mistakes in Car Maintenance.
An extended warranty may be purchased when you buy your vehicle or at a later date, but purchasing the warranty earlier will give you better coverage in the long run. If you’re the type of person who likes to be ready for all possibilities, an extended warranty may be just what you’re looking for. Some plans may also include roadside assistance, which is a great peace of mind on the road. With the ever-increasing cost of vehicle repairs, an extended warranty can be extremely valuable.
In deciding whether an extended warranty is right for you, you’ll need to consider a few things:
- To what extent is your vehicle already under warranty? Do you plan to keep the vehicle past this period?
- How reliable is your vehicle make and model? Is this car known for being high maintenance?
- Is the extended warranty from the factory, the dealer, or a third party provider? While these aftermarket warranties are cheaper, some are infamous for shady or dishonest practices.
- There are differences in deductible; you can pay per visit or per repair. Be sure you understand the difference before you buy.
- Some extended warranties are transferable should you decide to sell the car before the end of your contract. This can help to increase the value of your sale. For more information on increasing value of your trade, download our FREE checklist here.
- What exactly is covered? Does your warranty cover breakdown as well as wear and tear?
Under a “breakdown” warranty, coverage is extended only to parts that break. Additionally, some “entry-level” contracts don’t cover ABS brakes, so if your vehicle has this feature, you should consider upgrading your warranty. Overheating, regardless of its cause, isn’t covered in many warranties. Thus, if overheating occurs due to problems with an expensive part such as the radiator, you’ll be stuck with a hefty repair bill.
Every warranty is different, just as every vehicle owner is different. Before committing to a warranty, take the time to fully explore the ins and outs of its coverage implications and make sure they align with what will keep you feeling safe and comfortable in your car. The distinctions between the various plans might seem slight, but they can prove important in the event of an emergency.