Will You Need an Extended Warranty? The Answer May Surprise You

Toyota_PriusThe Toyota Prius is a real beauty and one of America’s best-selling hybrid cars. It is also very expensive and a 2015 model will set you back $30,000. Why am I telling you all this? Well, the answer is simple: Toyota Priuses and many other modern vehicles are very expensive to maintain and for all that pristine workmanship, Toyota doesn’t provide as much coverage under its standard warranty as it should. Neither does Ford or any other car maker for that matter.

The answer to this huge gap in coverage is the extended car warranty and depending on your goals for car ownership, you might need one.

Choosing an extended car warranty is easier said than done, however, and so this post is aimed at proving the pertinent information needed for a sound choice. Stick with me.
Now, this is an odd place to start with educating you about an extended car warranty but I am going to say straight off the bat that there are people out there who advise against getting one.

Typically, their reasoning behind the advice goes something like this:

People who buy extended warranties don’t get enough value out of them; or the more common thinking, that the people who offer these warranties don’t stand behind them.

Both arguments in my humble opinion don’t stand up to scrutiny because as with any big expense these days, due diligence is an important part of the buying process. In other words, you can get a raw deal pretty much anywhere if you are not vigilant.

The key then, to getting the most value out of an extended car warranty is to do your shopping around and get to the bottom of things.

Understanding Car Warranties
That Toyota Prius mentioned at the start comes with what is called a standard or manufacturer’s warranty. This is coverage from defect that protects the buyer up to a certain point and for certain parts on the vehicle.

Typically a car maker will provide a warranty for things like the power train; corrosion and tires. There are other important aspects of coverage that car makers give out the box but these rarely extend to the things are likely to break 3 months down the road. For this you need an extended car warranty.

Consider extended warranties the added oomph in piece of mind that anyone needs these days to help with fixing things on a car. And believe me, things will go bad.
The experts of course will decry extended car warranties but what they don’t tell you is that there are things on a car you definitely need coverage for.

Consider these repair costs for example:

  • The power mirror on a new car could cost you anywhere from $945 – $1,350 to replace
  • Power steering racks are about $1,200 a pop when they go bad
  • A busted fuel pump – $1,300

And that’s just three of the many costly repairs you are looking at. All told, you could end up spending more than $7,000 on car parts that the car maker won’t even think of covering and that, my friend, is the reason extended warranties are super important.

But where do you get one?
If you are buying a spanking new Toyota Prius from a dealership then you will likely have the salesperson make a pitch for you to upgrade. This doesn’t mean however, that you must take that upgrade… You might be able to get extended coverage cheaper elsewhere.

This is where “shopping around” part comes in and many people buy extended car warranties jump at the first offer they get without conducting proper due diligence. Here’s a link for a quick glance at Toyota’s warranty offering to new car buyers

The internet is your friend
In recent years a good mix of companies has entered the extended warranty space. This has helped to drive prices down and provide consumers with real and clear choices in what sort of warranties they take on. Many of these companies operate online and Sunday evening session of ‘Googling’ is sometimes all you need. All the due diligence you need to conduct can be done online; in fact, it is often recommended that you do these things online to reduce wait times and expedite cross-checking.

Of course there are cost considerations too, but doing the math is pretty simple… $1,500 for coverage on parts that can run you up to $3,000 (each) for repairs is dead easy to work out.
So, will you need an extended car warranty? Hopefully after seeing my humble outline above you’ll be convinced that having one is an absolute no-brainer.

Before you get one though, don’t forget to do some serious shopping around.

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