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Do You Need An Extended Auto Warranty?

By Steve Khzakia

After a house, the biggest purchase you typically will make in your life will be your cars or trucks. This purchase decision has many facets to it, too. You have to choose make and model, of course, but that is only the beginning. Color, year and options like fancy rims, sun- and moon-roofs, navigation system and so forth all come into consideration when you are choosing the vehicle you want. Then there is that famous last question from the salesperson or finance manager as you take pen in hand to sign on the dotted line – something like, Do you want an extended auto warranty?

Yes? No? Maybe? Do you really know? The time to figure this out is not when you are in the dealership with pen in hand, but ahead of time when you can give it thoughtful consideration, so take a moment now and find out how to make that decision.

Typical warranties

Auto manufacturers offer extended warranties themselves, although not every car maker underwrites and manages its own policies. If you are buying a new car in most dealerships, the seller will be ready, willing and able to extend the normal warranty for an additional period of time (and/or number of miles). The price will range from a few hundred to several thousand dollars, from entry-level packages that cover the standard power train of engine and transmission to premium plans that add the air conditioning, suspension, audio components and nearly everything else.

You can also buy a third-party policy, one that is not affiliated with the maker or seller of the car, at both the time of purchase and any time after that. These are generally the same as manufacturer plans, except you may find more flexibility in assembling a customized package that truly meets your needs and fits your budget. If you travel on business at times and cannot do without rental car reimbursement and towing if you have a breakdown, you can make sure to get that particular coverage when choosing your plan.

Similarities among plans

Whether you buy an extended warranty at the time of purchase or later, and from a carmaker’s dealership or a separate third-party firm, there are certain things you will always find. One is a deductible. In addition to buying the extended coverage, you will typically have a deductible to pay, although there are some new cars that come with no-deductible extended warranties. The point is, you will pay for the coverage one way or another, either as part of the car’s (higher) price or as an add-on.

Of course, you can choose plans with lower or higher deductibles, which affect the plan price as they do with accident coverage policies. You can pay top dollar for the plan and have no deductible at all, pay a bit more for a $50 deductible, or pay less and get a $100 deductible (about average) or even higher. You are also able to buy extended warranties on both new and used cars, trucks and vans, although the age of the vehicle may be restricted to a certain number of years and/or miles. Some warranty firms may exclude particularly rare or exotic autos.

Now, about that need

You have a basic understanding of the warranty, but the question remains – how do you know you need that extended warranty? The research you did on the car you bought (you did do research, right?) should have given you an idea of how it fares on repairs, weathers your Minnesota winters or Arizona summers, survives impacts and stands up to your own unique kind of use. This must factor in heavily, of course. However, do you need an extended warranty on your car if it has a 10-year/100,000-mile plan from a maker like Hyundai? Isn’t that coverage enough?

Actually, the Hyundai plan, like the new GM warranties (5-year/100,000-mile), only covers the major powertrain parts. That leaves a lot uncovered, and does not begin to take care of towing, rental cars, travel reimbursement and many other things that even the basic third-party extended warranties offer. In addition, manufacturer packages typically control the process in the important ways, namely, telling you what repair shop you will use (the dealership about 90% of the time), the parts you will get, the timetable for the work and so forth. Get in an accident when covered by one of these plans and you are out of the driver’s seat in more ways than one. It is the third-party specialty firms that are in the business of putting you back behind the wheel and in control of your car.

Your own personal formula

You need to look at the whole picture. If you have a manufacturer warranty now, or are buying a car that will have one, then you need to know what it covers so you can plan more precisely what you need to add in the way of additional (extended) coverage. If you are buying new, you might consider the prepaid scheduled maintenance plans now being offered by many carmakers.

So, do you need an extended warranty on your car? Many, many people do, and they cannot buy one if they wait until they need it. Neither can you. You should be rigorously honest with yourself about your own vehicular history, driving style and proneness to accidents or mishaps. You also need to understand what you are paying for and why.

Taken together, all these factors will result in your own personal formula for making this decision. Never answer a car salesperson with an automatic “yes” to this question. Rather, learn enough to say, “This is what I need…” – and then set about making your best deal for your true needs, as long as you get the right answers to your good questions.

Whether you have a car, truck, SUV, or van we can find the best possible extended car warranty for your money. Do not let your limited warranty expire without shopping for continued coverage first. Visit online today for more information.

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Article Citation
MLA Style Citation:
Khzakia, Steve "Do You Need An Extended Auto Warranty?." Do You Need An Extended Auto Warranty?. 12 Jul. 2010. 29 Dec 2014 <>.

APA Style Citation:
Khzakia, S (2010, July 12). Do You Need An Extended Auto Warranty?. Retrieved December 29, 2014, from

Chicago Style Citation:
Khzakia, Steve "Do You Need An Extended Auto Warranty?"

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