Extended Warranty

An extended warranty is a warranty that covers beyond the standard warranty period. Sometimes called service agreement or maintenance agreement, extended warranties are popular among more expensive products as they cost more to fix and repair. One of the most common extended warranties people buy are for their cars, which we will cover in this section.

New Car Extended Warranty
A basic new car warranty covers up to 36,000 miles or 36 months, which ever comes first. The power train is typically covered for 60,000 or 60 months, which ever comes first. When you buy a new car, the salesman will most likely try to sell you on an extended warranty which covers beyond a basic new car warranty. Usually during that time buyers are thinking about so many things that they get pressured or persuaded to get the extended warranty for the peace of mind.

To protect yourself from making a poor decision make sure that you research new car extended warranties online before you step into a dealer. Find out the reputable companies vs. the shady ones and contact those companies to find out the exact details of the extended warranty. Questions to ask include: cost of coverage, type of coverage, length of coverage, wear and tear coverage, deductible costs (you shouldn’t have any), transferability (if you sell your car to someone else), towing and rental car costs, and whether or not the extended warranty company pays the repair shop directly so that you don’t have to front the bill. Remember that when buying an extended warranty for a new car, take into account the basic warranty that you already have and decide how long you plan to keep the car. Otherwise, you will be paying for extended warranty that never gets used.

Used Car Extended Warranty
Before you buy an extended warranty for a used car, make sure that you check the warranty that may be still left on the car. Not all warranties will transfer either but some form of it should. After you have determined how much warranty is still left, decide how long you plan to keep the used car and determine the value of the car for the length of time that you plan to own it. Some used cars may not be worth buying an extended warranty for since it may cost more than the car over time. Follow the same questions to ask in the new car extended warranty section above to make sure you make the right decision.