When buying a used car, it’s worth considering an extended warranty to cover repairs that may be costly. However, you need to weigh the cost of the coverage against your risk tolerance, financial situation and the car’s reliability history before you make a purchase. Several companies provide warranties, and some offer different plans to fit your budget. You should also find out if you can cancel the policy later, and what happens if you sell or trade in your vehicle before the expiration date.
The most important question is if the warranty company can provide you with comprehensive coverage for the kind of problems that might arise in the future. Look at the list of covered parts and services, and read the fine print to see what you’re getting for your money. For example, many warranty providers exclude routine maintenance such as oil changes or tune-ups, and some will not pay for ancillary costs like rental car fees or a mechanic’s deductible. Typically, you’ll get better coverage by purchasing an extended warranty directly from the car manufacturer or a trusted third party provider.
A few companies that offer used-car warranties include Carchex, Select Auto Protect and National Warranty Corporation. These companies often have online comparison tools that allow you to compare the various coverage options available for your specific car and budget. For example, you can choose a bumper-to-bumper plan that is similar to the original factory warranty and covers all components except those listed as exclusions. Carchex’s Gold plan is an example of this type of coverage, with a price point that’s in the middle of the market.
Some extended-warranty plans are designed to help you save on routine maintenance by covering the cost of such things as oil changes, tire replacements and brake pad replacements. Other plans are designed to cover major repairs, including engine and transmission rebuilds and replacements, axle and drivetrain repairs and electrical system repair. Most of these policies require you to pay the upfront cost for the work and then seek reimbursement from the warranty company once it is completed.
You should also understand the warranty’s deductible terms. While you’re probably going to pay a deductible, the company should reimburse you after your car is repaired. Some warranty providers offer different deductible options to fit your budget, and some can even provide you with a free rental car while the work is being performed.
You should also be aware that some used-car warranties are provided by the automakers themselves and dealers, while others are offered by independent third-party companies. You can usually find out whether a warranty is being sold at the dealership by looking for a Buyer’s Guide in the window of the vehicle. Dealerships that sell their own warranties generally have more competitive rates than independent companies. They also tend to have more knowledge about the specific vehicle in their inventory. However, you should still shop around and find the best deal for your needs. extended warranty for used car