What Is An Extended Car Warranty?

By Author: Steve Khzakia
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With new cars averaging about $26,000, buying one is a major investment and should be considered as such. Although some buyers might think they have paid enough to expect problem-free driving and a long lasting vehicle, the fact is that a healthy fraction of consumers add an extended warranty. What is an extended car warranty, exactly, and how do you make the decision about getting one?

An extended car warranty - which can be purchased for both new and used vehicles, at any time during your ownership - can be thought of as "mechanical health insurance." Similar to service plans, with elements of auto insurance like possible deductibles and exclusions, you are essentially paying up front so that you don't have to pay a lot more when something breaks down. The more you know about the make and model of car you drive, particularly its repair record over time, the better equipped you will be to decide about an extended warranty. Similarly, the more you know about the different kinds of warranties, the better.

Coverage
Most carmakers offer a minimum warranty of three years and/or 36,000 miles on new model sales, ...
... many of them bumper-to-bumper plans. In addition, some manufacturers and dealers offer extended warranty coverage on the powertrain and engine as part of the deal, and some dealers offer limited warranties on "certified" used vehicles. In the majority of cases, these warranties offer good protection to the average car owner. However, once you start deviating from the norm - driving more than 12-15,000 miles a year, using your car for business, living in an area that's hard on cars and so on - you become an even better candidate for an extended warranty.

The amount of additional coverage you get, whether bumper-to-bumper or just the engine and powertrain, depends primarily on your driving characteristics (as previously mentioned) and a clear understanding of the strengths and weaknesses of the car model being covered. You need to do your homework about repair records, recalls, replacement costs and dependability as part of your car buying process. Do not go into a car dealership for any car, new or used, without having done your preparation. This gives a serious advantage to the salesmen.

Other factors
It is less costly to buy an extended warranty if your car is still under the manufacturer's warranty. If you wait to buy this coverage until after your original bumper-to-bumper warranty expires, you can pay from a little to a great deal more. The earlier you buy, the lower your expense. Another rule of thumb is that the more exotic, rare or expensive the car, the more an extended warranty will cost. Imported cars often have higher parts costs, too, even when the car is not a Ferrari or Bentley, which is why extended warranties are pretty popular with foreign car owners.

Remember, too, that where you live can affect the cost of coverage. It is costlier to get any kind of auto service if you live in the middle of nowhere - but on the other hand, if you do live in rural Montana or some place like it, your car is extremely important and you need to protect that investment. Regardless of where you live, the more you rely on your automobile, the more you need to do to ensure that it keeps running. There is no other way to protect your car against the unknowns in the future, and you certainly can't buy an extended warranty if you wait until you need it.

Sources
There are essentially three sources for extended warranties. You can buy them from the manufacturer, new and used car dealers, and independent firms that may or may not deal in other kinds of third-party product warranties. As always, the consumer has to decide what is best in a particular set of circumstances, and do enough research on the car to make an intelligent decision about covering it.

If you get an extended warranty from a major manufacturer, you also get a factory-supported dealer network across the U.S. and Canada, in most cases. These warranties are normally written in such a way as to minimize negotiating repairs, prices or the brand of replacement parts. The upfront cost is the highest, usually, of the three sources, so you should investigate the reach of the dealer network in case you intend to move, or if you travel widely.

Dealerships can offer lower upfront costs, and you will be buying and using the coverage plan at the same place. In these warranties, there is often only one service location, so you need to be a close-to-home driver for this to be the best choice for you.

The lowest upfront cost, which can be as little as half the price of a manufacturer's plan, is with independent, third-party warranty firms. You get the most coverage choices, can often choose your own repair shop and are dealing, much of the time, with people who are quite expert with automobiles and their upkeep. A few fly-by-night companies have given extended warranty firms a black eye, but all you need to do is shop for coverage the same way you (hopefully) shopped for a car. Find a few reputable firms, check them out with the Better Business Bureau, ask for some references from happy customers - then compare costs and coverage. Be a smart consumer, and your car can be completely covered at a reasonable cost. Looked at this way, the answer to "What is an extended car warranty?" is simple. It's peace of mind!
About Author:
Endurance Warranty.com has been helping car owners save money and gain peace of mind for almost twenty years. You won't find a more affordable or more comprehensive group of extended auto warranty plans anywhere. Nor will you find more knowledgeable or friendly staff to help you find the warranty for you. Visit online today.