Extended Warranty: Yes or No?

When you buy a new car you will be given the option of buying an extended warranty. In reality you will likely find yourself under a lot of pressure to buy one. Therefore you should know before you start buying a car whether or not you need one. The fact that the dealer is so desperate to sell you the warranty should give you a good idea of who really benefits from it.

In most cases you will be better off not getting the extended warranty. The main reason for this is that modern cars are so well built that they really don't require that many repairs. Besides most car makers these days offer warranties that are so long that they will probably last until you sell the car anyway. People who buy an extended warranty do so because they are afraid that as soon as the factory warranty expires they will need to make extensive repairs. This rarely happens and is not really something that you need to worry about.

The other reason that you probably aren't going to want to get the extended warranty is that the coverage that they offer is not very good. Most of these will exclude certain items from coverage; rest assured that the items excluded are the ones most likely to break. In most cases there will also be a deductible involved if you want to make a claim. Even then a lot of the companies that offer these warranties are not all that scrupulous and will often use any excuse to avoid paying you. This makes it very unlikely that the coverage that they offer will be worth what you are paying for it.

If you decide that you do want the extended warranty you want to make sure that you are getting the best deal possible, that means that you are going to want to shop around. In many cases your car dealer will pressure you to the point of telling outright lies to get you to buy the warranty. They will often say things like you can only buy the warranty from the dealer or that you can't get financing unless you buy the warranty. These statements are not true and if your dealer is telling them to you it might be best to buy your car from somebody else.

One other thing that you have to watch for is that many car dealers will sneak the warranty into the deal without telling you. They usually do this when you finance the car by talking to you about the monthly payments rather than the total cost. In many cases when they do this they will add the warranty into the monthly costs without your knowledge. This is why you need to negotiate the cost of the car and the financing separately, to prevent things like that from happening.