Used Car Extended WarrantyUsed Car Extended Warranty

What Is an Extended Car Warranty?

When you buy a car extended warranty, you’re buying a plan to protect your vehicle. If something happens to your car, like a complete engine breakdown, the warranty covers repair expenses you would otherwise have to pay on your own. 

So long as the problem occurs within a specified time frame or before your vehicle hits a specific mileage cut-off, the warranty will cover your expenses.

Two types of providers offer extended car warranties: manufacturers and third-party extended car warranty companies. You’ll first have a manufacturer’s warranty. This is the warranty you get when you buy a new car. 

It has a time limit or a mileage limit. At that point, your extended warranty kicks in. Each company offers different coverage options, including coverage for towing or rental cars.

An extended warranty more commonly covers the expenses associated with repairs to the parts of the car you need to drive it. 

For example, the extended warranty may cover your engine or transmission, but it won’t necessarily cover your tires or electronics. Additionally, the warranty might cover your powertrain, but it won’t cover oil changes or other routine maintenance.

 

What Do Extended Car Warranties Cost?

Extended car warranties vary in price. While some extended auto warranties cost just $1000, you’ll find plenty of other warranty plans available for several thousand more. Several factors come into play when it’s time to assess the cost of your extended warranty:

 

What Does a Used Car Warranty Cover?

Used car warranty companies offer multiple plans that cover different lists of vehicle components. Below are the three main coverage types you’ll find:

Bumper-to-bumper: A bumper-to-bumper warranty is most similar to the new vehicle limited warranty and covers all parts not specifically listed as exclusions in the contract. Because of this, it’s commonly known as an exclusionary warranty.

Stated-component: These plans protect most major components such as the air conditioning and electrical systems, but they’re less comprehensive than bumper-to-bumper plans. Stated-component coverage only protects what’s written in the contract and is often considered best for high-mileage vehicles.

Powertrain: A powertrain warranty covers the most essential systems the car needs to function, like its engine, transmission, and drive axles. Because powertrain coverage is pretty basic, you’ll also find that it’s the cheapest coverage option.

Even with a used car, you’ll likely be eligible for a bumper-to-bumper warranty from most third-party providers. Note, though, that many people searching for used car warranties consider stated-component coverage instead of full bumper-to-bumper protection.

 

What Is Covered Under an Extended Warranty?

While the coverage for your extended warranty will depend on the manufacturer (OEM warranty) and the type of policy you choose (aftermarket warranty), most warranties will cover the following:

Vehicle Repairs

The reason that most individuals choose to purchase an extended warranty is to receive coverage for certain vehicle repairs. Repairs include the unexpected failure of the vehicle that is not related to everyday wear and tear. 

Such failures include engine and transmission failures. These warranties can cover both labor costs and parts replacement, but the extent of the coverage is based on the plan you have.

Roadside Assistance

Another benefit that most plans offer is roadside assistance. This is helpful if your car breaks down and includes the cost of towing to your garage. Additionally, these plans also cover minor problems including fuel delivery if you run out of gas, and they’ll also provide a battery boost if you wake up to a dead battery.

Rental Car Coverage

When your car is in the garage getting fixed, you’ll still need to get around for your work and personal life. Extended warranties usually provide rental car coverage to limit the inconvenience of a car breakdown to your daily life.

 

Coverage for Your Used Car

An extended warranty won’t be all-encompassing. Some of the wear-and-tear type parts, items that wear down over time, won’t be covered by an extended warranty. There are different coverage tiers, too, so be sure to go over the fine print and find the warranty that’s the right fit for your specific needs.

It should also be determined who will handle the costs for any repair bill. Are the repairs completely covered? Will you be paying a deductible? Be sure to find out the answers to these questions prior to agreeing to an extended warranty.

Finding out who stands behind the warranty is something you’ll need to figure out, too. Some dealerships will offer third-party warranties. Make sure the warranty is backed by the manufacturer, not just the dealership or another company.

 

When to Avoid an Extended Warranty for Used Cars

There are situations when it’s best to avoid purchasing an extended warranty for a used car. Here are some factors to consider:

Manufacturer’s warranty: If the used car is still covered by the manufacturer’s warranty, there is no need for an extended warranty.

Used car reviews: Checking used car reviews can provide insights into the reliability of the specific make and model. If the car has a good track record for reliability, an extended warranty may not be necessary.

Inclusion warranty: Some extended warranties only cover specific parts, such as the engine or transmission. These inclusion warranties may not provide comprehensive coverage, leaving you exposed to additional repair costs.

Warranty coverage: IT’s important to carefully review the details of the extended warranty to understand what is covered and what is not. If the coverage is limited or does not align with your specific needs, it may not be worth the cost.

Warranty costs: Extended warranties can vary in cost, and sometimes the price may outweigh the potential benefits. Assess the cost of the warranty against the value it provides.

Warranty company reputation: Before purchasing an extended warranty, consider the reputation and track record of the warranty company. Look for companies with a solid reputation for customer service and reliable coverage.

By taking into account these considerations, you can make an informed decision about whether or not an extended warranty is the right choice for your used car.

 

7.5 Ways to Maximize Your Extended Warranty

To maximize the benefits of your extended car warranty and ensure that you are getting the most value for your money, it is important to follow these recommendations:

Understand the Coverage: Read and understand the terms and conditions of your extended warranty. Know what is covered and what is not, as well as any specific requirements for filing a claim. This will help you make the most of the benefits provided by the warranty.

Utilize All Benefits: Take advantage of any additional benefits your extended warranty provider offers. These may include roadside assistance, rental car reimbursement, and trip interruption coverage. 

Knowing and utilizing these benefits can save you from unexpected expenses in case of a breakdown or accident.

Maintain Your Vehicle Properly: Follow the manufacturer’s recommended maintenance schedule to keep your vehicle in good working condition. Regular maintenance, such as oil changes, tire rotations, and filter replacements, can prevent mechanical failures and reduce the likelihood of major repairs. Proper maintenance is also crucial for the validity of your warranty.

Keep Detailed Records: Maintain organized records of all maintenance and repair work. Warranty providers often require proof of maintenance records when filing a claim. Detailed records will ensure that your warranty remains valid and that you can take full advantage of its benefits.

Transfer the Warranty If Selling the Car: If you decide to sell your car before the extended warranty expires, check if it is transferable to the new owner. Transferring the extended car warranty can increase your used car’s resale value and provide the buyer additional peace of mind.

 

Conclusion.

After considering various factors such as the type of car, driving habits, ownership duration, and the cost of the warranty, it is clear that deciding whether an extended car warranty is worth it requires careful evaluation. It is important to assess the coverage options and understand your consumer rights under Australian law.

When assessing the value provided by an extended car warranty, it is crucial to weigh the potential benefits against the warranty cost. Consider the specific needs and preferences that you have for your vehicle.

Keep in mind that while an extended warranty may offer peace of mind, it may not always provide value in terms of coverage and protection.

By admin