Should You Get an Extended Warranty on a Used Car?
Aside from buying a lemon, only having the warranty expire is worse when acquiring a used car. The question therefore is not should you buy an extended warranty for a used car, but what to consider when buying one. Extended warranties are also important for existing car owners who are at the end of the lives of the factor or manufacturer’s warranty that came with the vehicle. All in all, it’s an essential thing to have so let’s explore below the key considerations involved in putting one in place.
Your used car purchase should be very methodical and thorough and the same measured approach should be taken when acquiring an extended car warranty. The first consideration is the state of the warranty on the used car being acquired. Is it in place? And if so, is it near the end of its life? By asking these questions you can assess in a glance what you need to shop around for and potentially what things will cost you. Often many people, who buy used cars, ignore these key questions only to face disappointment months even weeks later after the purchase is made. Don’t let this happen to you.
The next check is the state of the vehicle itself. Are there any scheduled checks that could reveal extensive repair costs? Things like transmissions on a vehicle have a period of usefulness, beyond which either extensive repairs or absolute replacement is needed. Assessing things such as this will help structure your plans for any extended warranty—particularly as it relates to what is covered.
Your next check should be on the vehicles service history. Has it been in the repair shop often? Is the make or model one that is repair and service intensive? What about the cost of parts, are they inherently expensive? These are very important questions to answer because much of the cost of the extended warranty that is put in place will hinge heavily on them. Some cars, like Hondas for instance, are reliable, but their parts are not always affordable. Getting this qualitative understanding will save you the headache of paying too much for an extended warranty.
The Warranty Itself
Once you’ve laid the groundwork for your eventual purchase of an extended auto warranty, you really ought to get to grips with the various warranties that will be available to you. In this regard, you’ll need to understand the difference between coverage periods, coverage particulars or items and the mileage considerations that companies place on extended warranties.
Basic warranty periods start at around six months and extend all the way up to six years. The longer the period of coverage, the more the warranty will cost. Most warranties cover the wear and tear on tires as standard, and most will also cover transmission replacement due to wear and tear; and windshield protection. Other things such as labor costs and courtesy car considerations will have to be broached, as most will not make these available as standard offerings. Some extended warranties are also big on how many miles they’ll offer coverage. The number of miles as you are aware dictates the level of wear and tear that various parts of the car will undergo, and so warranty companies make very specific terms for the extent of coverage you can have. Typically mileage coverage will go as far as 100,000 miles.
You’ll probably also want to get a qualitative understanding of the different types of warranties by name. The most common ones are:
- Manufacturer’s Warranty: This is the original warranty that is put in place by the maker of the car. This is usually extensive, but depending on when you acquire the car, it may or may not be near the end of its life.
- Merchantability Warranty: In general contract law, any good or service sold should have merchantable quality, which means that thing should be fit for the purpose bought. If the car you just bought, used or not doesn’t make it round the first corner from the lot, its failed this basic warranty test.
- Extended Warranty: This is the one you are most likely looking to get and it involves some type of coverage plan that gives you the funds to repair specific items that go bad on the car. These warranties are offered nowadays by dedicated warranty companies but in the past (and still today) were offered by lending institutions such as banks.
All in all, a combination of cost and specific items required under coverage should inform your decision of which warranty company to go with. If you use the internet, your choice can be made easier if you enlist the help of third-party recommendations. Not only will you benefit from the wealth of experience inherent with these recommendations, you’ll save time—something which is very important when making a purchase decision on a used car.