Tips on Buying an Extended Vehicle Warranty

February 27th, 2021 by


Did you spend many nights researching the car model you want to buy, the make, and whether you should buy a new or used one? You may have also thought about how you’d get the finances for it, but you weren’t prepared for this question that you’d be asked, whether you’re going to buy an extended warranty or not.

Extended warranties are an extension of the manufacturer’s guarantee coverage; this covers repairs and different parts’ replacement. It is also classified as a service agreement, maintenance agreement, or service contract; in most cases, an extended warranty is sold separately or is additional. Whichever name you choose to call it, the warranty is used to cover repairs; this warranty picks up where the manufacturer’s warranty falls off.


The question most car owners face today is, “Are extended warranties necessary or is it trivial?” Below are some tips on obtaining an extended vehicle warranty and questions you should consider asking before investing to help with that decision.

1.   How long you’ll keep your vehicle?

Most car manufacturer’s warranty lasts for approximately three years while others’ time varies. If you do not intend to keep your car for three years, there’s no sense in buying the service contract. However, a survey done in 2016 showed that most new car owners keep their cars for over six years.

These drivers should, however, consider a maintenance agreement for coverage after the producer’s warranty ends.

2.   What type of car are you going to order?

A Consumer Report done in 2013 with 12,000 people who bought a service agreement showed that the persons who were most satisfied with purchasing a maintenance agreement were those who owned cars from companies with a low-reliability average such as BMW, Mercedes-Benz, and Dodge. Getting a car such as a Toyota or Honda or another brand with a high-reliability average would not make any sense; it’s best you spend on repairs out of pocket.

3.   What is included under the extended warranty?

Before deciding on a service contract, it’s good to determine what is included in the warranty. Not all extended warranty covers all costs that are not on the manufacturer’s warranty. It is vital to read the fine print in a service contract. However, some companies will provide a listing of what is included in the warranty.

It is essential to note that most extended warranties don’t cover regular maintenance of the vehicle. Others, however, cover some portion of the maintenance but not labor cost. After the Consumer Report was conducted, it showed that persons who purchased the service agreement saved approximately $800.

The average value for coverage is over $1,200, which, when calculated, gives a loss of approximately $350. Even if there’s coverage, it may not include the expense of repairs.

4.   Which organization backs the warranty?

A maintenance contract can be backed by an independent company, a manufacturer, or a dealer. It is vital that you know who will stand the expense of repairs of the warranty. A little nugget to know is that buying a service contract from a manufacturer can be more costly than purchasing through a third-party company, even though the coverage will be better.

It is also essential to know what to do in case an administrator goes out of business. So you should consider asking questions such as if the dealership goes out of business will the manufacturer honor the warranty?

5.   Will you use the warranty?

While it may seem weird to purchase something that you won’t use, unfortunately, most drivers do. As reported by the Consumer Report, fifty-five percent of drivers who buy a maintenance agreement warranty do not use it. Some drivers didn’t see it necessary to go through the hassle of using a service contract.

You’d have to schedule to repair your car with the original dealer, which depends on the contract you signed. For example, if you purchase a car from another dealership, you’d have to bring it to that dealership if anything happens to it. What if you moved to another state? You’d have to go back to the original dealership for repairs, which most time causes inconvenience.

6.   How will you pay for the extended warranty?

The coverage of a service contract depends on the type of car. The contract cost can run into thousands of dollars. The bulk of people who bought an extended warranty did so the moment they bought their car. While it is easy to add the cost into a loan, its inconvenience will cost you greatly.

If the service contract’s value is added to a loan, interest must be paid over the loan’s life.

7.   Can you be assured peace of mind?

Even though statistics proved that most people who buy a service agreement don’t use them, it’s the peace and security that come with buying why it’s done. Reading the fine prints is essential so ensure it’s done before deciding to get an extended warranty.

If you are looking for low mileage, one previous owner used vehicle, then look no further than ALM Cars only at ALM Mall of Georgia, the best used car dealership in Georgia. We have stock of over 3,500 cars to look at. Call or visit our dealership today.



Posted in Tips