An extended car warranty may help relieve the cost of certain auto repairs when the manufacturer’s warranty expires.
What is an extended car warranty?
An extended warranty, aka “a vehicle service contract”, is an alternative purchased plan to help you pay for the cost of certain repairs your car may need. It usually begins when the manufacturer’s warranty concludes, but the two may overlap.
An extended warranty may not cover everything. To find out for sure what an extended warranty does and doesn’t cover, read the agreement’s carefully.
Extended car warranties: New and used cars
When you buy a new car, you probably won’t need to use an extended warranty right away because the manufacturer warranty typically covers the cost of most repairs for the first few years you own the car.
The length of the warranty varies by manufacturer, but many offer warranties for three years or 36,000 miles, whichever comes first. Powertrain warranties can last up to 60 months or 60,000 miles.
A used car from the dealer may not be covered under the manufacturer’s warranty. The Buyer’s Guide on the car window should let you know whether the car is being sold with a warranty. If it does have a warranty, you may need to pay a fee to have it transferred to you.
If you’re buying a car that’s no longer covered by the manufacturer warranty you may buy an extended warranty for an extra fee.
Pros of an extended warranty
The biggest benefit of an extended warranty is that it can save you money if a costly repair is needed that’s covered under your contract. Instead of paying the full bill out of pocket, you would only be responsible for paying the deductible (if you have one). The warranty provider would pay for the rest, so long as the repair in question is included in the service contract.
Having an extended warranty can also help provide a sense of comfort knowing the repair is within your budget.
If you do decide to purchase an extended warranty, be sure to do your homework, watch out for auto warranty scams and work with a reputable company.