Whether you are purchasing a car through a certified dealership, used car dealership, or private owner, you have the option of getting an extended auto warranty on the car. This can be directly through the dealership or through a third-party source. There are both pros and cons to purchasing an extended auto warranty. Let’s explore.
Cost Comparison
If you have the budget and the saved funds to cover a sudden need for auto repairs then you may not need an extended warranty. This means setting aside at least a couple thousand dollars. However, if having a one-time payment tacked onto your car purchase for peace of mind later down the road sounds better to you, an extended auto warranty might be your best bet.
Coverage Options
Auto warranties come in all shapes of sizes. Choosing which one works best for your needs is crucial. You may not want comprehensive coverage. You may want to purchase a basic package to cover anything dire that may happen to your engine. Usually, there are options such as bumper-to-bumper which covers nearly everything except wear-and-tear or routine maintenance that is your responsibility. This includes items such as brake pads, tires, air cleaners, or oil changes. In addition to bumper-to-bumper options, there are some like the powertrain warranty that covers basic functions that occur under the hood, like engine and transmission.
Other Considerations
All extended warranties are different, and it’s important to read the fine print. For example, purchasing an auto warranty through a dealership will, often times, require that you only receive service through authorized dealerships. This means no local, small auto shops. Others allow it. Or, some warranties require that you pay for any repairs up front and then they will reimburse you (a process that takes some time.) If you are the type of person that does not have the rainy day fund, this choice may be ineffective for you.
Warranty Overlap
Before you ever say yes to an extended or additional warranty, make sure you have an understanding of what warranty is already on the car. For most cars, they come with some sort of factory warranty. Even if you are buying a used car, if it only a few years old, it may still have the factory warranty associated with it. Also, if you are buying certified pre-owned through a dealership, this usually comes with a warranty as well. Likely, you will still be asked if you want to purchase an extended warranty, so it’s important to know if this would be unnecessary and only cause warranty overlap.
At Blue Sky Auto Finance, we work with our partners to provide you with the best and most efficient options when considering an auto warranty. As auto loan providers, we know how crucial it is to smartly and affordably finance a vehicle. Check out our page on auto warranties here or reach out for more information on how we can assist you with any auto needs.
