Understanding how extended auto warranties work can be complicated, even for vehicle owners who’ve had them in the past. To help you sort through the basics, we answer your most important questions.
Do you need an extended warranty?
Not everyone needs an extended warranty. Do you keep your cars for only about three to five years before trading them in? If so, then you likely don’t need an extended warranty.
If you’re buying a new car ranked high for reliability (Consumer Reports or Kelly Blue Book are great resources for finding this information), there may be no need for an extended warranty. The money you shell out for the warranty may end up being more than the cost of repairs you’ll need after the factory warranty runs out.
If you’re buying a pre-owned car or a car ranked lower in reliability, or you intend to drive your car for as many years as it can roll on four tires, then an extended warranty is a worthwhile investment. Also, if you find the expense worth it for the peace of mind, then purchase an extended warranty.
When can you get a warranty?
The answer is simple: almost anytime.
If you get an extended warranty when you first buy your car, you can roll the price into your monthly payment. Generally, the earlier you buy your extended warranty, the less expensive it will be and the more options you’ll have in terms of coverage. But if you decide after a few years that you want to invest in an extended warranty, shop around for the coverage you want at a price you can handle.
Remember, too, that extended warranties won’t cover pre-existing issues, so you won’t be able to purchase an extended warranty after a problem surfaces and expect the warranty to cover that repair.
How much coverage do you need?
This depends on the vehicle. If you’re buying a brand-new car off the dealership lot, your best bet is a bumper-to-bumper warranty that covers as much as possible; keep in mind, however, that no warranty will cover normal wear and tear. If you’re buying a pre-owned car or getting an extended warranty for a car you’ve owned for years, you may want to opt for basic coverage for just the engine and transmission.
Also, try to find an extended warranty that will allow you to take your car anywhere you want for repairs (some warranties have restrictions on approved repair shops) and that will pay the repair shop directly, so that you don’t have to deal with the paperwork.
To learn more tips or about other solutions AAA provides motorists and their vehicles, including vehicle protection plans, please visit AAA.com/Autos.
The content of this article is for informational purposes only. AAA does not guarantee any particular outcome.
This article originally appeared in the July/August 2019 edition of AAA World.