Should I Buy an Extended Warranty for a Used Car?

If you’re in the market for a car, it’s time to start shopping around, both online and in person, to see what’s available in your price range and to start thinking about what you hope to get out of your vehicle. Shopping for a car can be a very exciting, exhilarating experience, and even if you are planning to purchase a pre-owned set of wheels, the joy of taking your car out on its maiden voyage around the neighborhood is beyond compare!

However, before the ritual of taking joyrides and proudly showing off your car to friends begins, there are a few things you’ll definitely want to take into consideration before you sign on the dotted line. You probably have heard the phrase “total cost,” meaning how much you can expect to pay for your car beyond the sticker price. Routine maintenance and unexpected repairs or total part replacement are some of the most expensive parts of being a car owner, and it’s essential to have a plan for paying for these things before you move forward with your used car purchase. Since used cars don’t come with the same kind of manufacturer’s warranty as a new car, if something breaks down, you’re pretty much on your own when it comes to affording both major and minor repairs. Right?

Actually, there is such a thing as an extended car warranty for a pre-owned vehicle. Private insurance companies offer these extended warranty plans at a low, affordable monthly cost to help protect you against both unforeseen major repairs and minor repairs due to normal wear and tear of your vehicle over time. Smart used-car buyers know that an extended car warranty can help save them hundreds, potentially even thousands of dollars over the lifetime of their vehicle.

What’s an Extended Car Warranty?

When you buy or lease a new vehicle from the dealership, you are offered an extended car warranty. This warranty goes beyond the standard manufacturer’s warranty that comes with the purchase of your vehicle to provide coverage for parts and repairs long after the 36,000-mile mark, which is when most standard warranties expire (and, maybe not coincidentally, when a number of car parts begin to give out!)

However, as we’ve mentioned, used cars don’t come with this kind of guarantee from the manufacturer. A pre-owned vehicle is sold “as-is” from a dealership or a private seller, and the burden of affording repairs falls squarely on the shoulders of the new owner.

Most used car buyers search for “extended auto warranties”. Extended warranties are actually either Mechanical Breakdown Insurance (in California) or a Vehicle Service contract (in the rest of the USA). According to Olive, coverage can happen as quickly as tomorrow.

Purchasing an extended car warranty at the time of buying your used car can effectively protect you against having to pay out of pocket for the potentially costly repairs that can begin to crop up even in new cars. Repairs and replacements of parts large and small will be covered for a considerably longer time than they would have been under the standard warranty, giving you the reassurance that you will be able to handily afford an unexpected auto repair.

Benefits of an Extended Car Warranty

Let’s put it this way- Future You will thank Past You for opting into extended warranty coverage every time you find yourself in a situation where a repair or part replacement is necessary for your pre-owned vehicle. Car repairs- even minor ones- can add up fast, and it’s not uncommon for people to have to find alternate means of transportation or even take out a loan because they can’t afford to come out of pocket for the necessary repairs to their vehicle. The main benefit of the extended car warranty is the peace of mind that your car can be repaired at no additional cost to you, in most cases.

Disadvantages of Extended Car Warranties

So if extended car warranties are so great, why doesn’t everyone just buy them? For one thing, not everybody realizes that there is even such a thing as an extended car warranty for a used vehicle. Going into a pre-owned car purchase, you may already be resigned to the fact that the money for any and all repairs is going to come straight out of your pocket- but with an extended car warranty, that is something that may not have to happen!

Even if you have heard of extended car warranty options for used vehicles, you may be a bit wary of some of the companies that offer such plans. After all, not all extended warranties are created equal, and to be frank, some of them are downright scams! Be sure to do your homework and thoroughly research the insurance provider to make sure that you are purchasing your used-car extended warranty from a reputable business. 

Another reason a person may hesitate to purchase an extended warranty for a pre-owned car is the cost. Since an extended car warranty would translate to one more monthly bill, it’s tempting to just play the odds that your car will never be in need of an expensive repair. However, over time, the cost of the extended warranty can certainly pay for itself- just one transmission repair can cost upwards of $1,500, so you can see how quick of a return you could get on your investment!

An extended car warranty may be just the thing you need if you want the peace of mind that you’ll never be strapped for cash due to an unforeseen car repair. If you’re currently looking at pre-owned vehicles and planning to make a purchase in the near future, please take the time to consider an extended car warranty- it could save you a bundle in the long run!

 

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Will Hopstetter

Will is an automotive market enthusiast living in the United Kingdom. He holds a diverse background in automotive and enjoys utilizing that to produce insights into the inner workings of the industry.
Will Hopstetter
Will is an automotive market enthusiast living in the United Kingdom. He holds a diverse background in automotive and enjoys utilizing that to produce insights into the inner workings of the industry.