Should I buy an Extended Warranty?
Car repairs are expensive; in fact, the average hourly labor rate for auto repair is $70-$125. And that’s just the labor. Parts are an additional charge
Instead of paying massive amounts for car repair as your car ages, consider getting an extended warranty. An extended warranty doesn't just extend the dealer’s standard warranty; a 3rd party extended warranty sometimes covers more than the dealer warranty. For example, an extended warranty covers the entire engine, not just the powertrain covered by most dealer warranties.
Many people are concerned that they shouldn't get an extended warranty because their car is older and they will purchase a new car before the warranty ends. Nothing could be further from the truth. First, an older car is obviously more likely to break, meaning that it’s the perfect candidate for an extended warranty. Secondly, when an older car breaks, it can be a large component such as the engine or transmission. By using your extended warranty to fix your car, you save yourself the cost of purchasing a new car and the monthly payment.
Similarly, owners of newer cars are hesitant to purchase an extended warranty for fear of not using it and thus wasting money. While it’s true that a newer car is less likely to have a major breakdown, these cars often suffer from smaller problems. Not only do these repairs “nickel and dime you” to death if you choose not to repair them immediately that can cause lasting damage. For example, a short in the electrical system causing an annoying problem like a malfunctioning window or lock can cause the entire electrical system to fail over time. Should I buy an extended warranty now should be an easy question?
Warranties come with different features, usually based on the age of your vehicle. Generally, the warranty’s terms are set by the company offering the warranty. The general rule is the older the vehicle, the less is covered. All warranties cover components such as the engine and transmission, but some others don’t cover components such as the suspension.
An extended warranty covers your car when the manufacturer’s warranty is over and your car needs the most protection. No matter how old your vehicle, an extended warranty will save you money over the life of your vehicle. Most importantly, you can drive with the peace of mind that if something does go wrong, you won’t incur the massive charges associated with car repair. So, if you find yourself asking " Should I buy an extended auto warranty, your answer should be YES!