An extended car warranty protects you as the owner from incurring huge repair costs after the initial car warranty has expired. It, therefore, allows you to have your car repaired without undergoing financial stress for an additional period of time after the original factory warranty has expired.
If you’re buying a car and you are on a tight budget, and you do not want to deal with the possibility of incurring expensive repair costs in the future, an extended warranty is what you need. Here are the things you need to look for when choosing an extended warranty for your car.
Coverage
Extended warranties are not all-encompassing; Different extended warranties cover different items for your car. Most of them omit coverage of wear and tear parts since these parts are guaranteed to eventually wear out or break at some point in the future.
Extended warranties are at times grouped into different tiers with each tier having a different cost and level of coverage. Opt for an extended warranty for your car that is cost-friendly and covers the items you are likely to incur future costs for. You can make a list of these items based on your past experience with other cars. If you have incurred repair costs over a particular part in the past, there is a high probability of this re-occurring in the future, and thus your choice of the ended warranty should cover this. On the other hand, you do not have to pay extra for repair cost items you are less likely to incur based on your past experience.
TRANSFERABLE
The extended warranty should be transferable to future owners. This helps both the seller and also the buyer as it might increase the resale value and also gives reassurance to a future buyer. Transfer fees for extended warranties are quite small.
Nature of the Contract
You need to ensure that you completely understand the warranty contract before signing it. Avoid contracts with reimbursement programs, as they require you to pay for the repairs promising to refund you after you make a claim. The best warranty should not only cover vehicle parts but also cover labor costs incurred since labor costs tend to be very expensive.
The Company Behind the Extended Warranty
Most dealers offer third-party extended warranties from companies without a solid track record on performance. The extended warranty should be backed by the specific automaker and not another company or dealer. A warranty backed by the manufacturer can be used at any dealership of your choice, unlike a 3rd party one which might be limited to only where it was issued. As such, an automaker-backed extended warranty gives your car a higher resale value than a 3rd party-backed extended warranty.
The choice of an extended warranty might be difficult, but with these tips, you will be able to choose the extended warranty for your car and get the peace of mind and financial freedom you are looking for.
