Extended Warranties For Cars

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An extended warranty for car is offered by dealerships, auto clubs and insurance companies (which also call their products mechanical breakdown insurance). They vary in terms of price, coverage, deductibles and length. It’s important to find a provider with an excellent reputation for customer service and that offers options like roadside assistance and rental car reimbursement. You can often get quotes online and even pay for the warranty up front or roll it into your loan payment.

Before you buy an extended warranty for your car, consider whether the vehicle’s manufacturer’s warranty or your own insurance will cover repairs. It’s also a good idea to read the fine print of any policy. For instance, some warranties require that you service the vehicle at an authorized repair facility or else the repair won’t be covered. Others contain a depreciation clause that reduces the amount paid for repairs based on the car’s age and mileage.

There are some situations when an extended warranty for your car may be worth it. You might need the extra protection if you’re planning to buy a used car that has already passed its manufacturer’s warranty or if you’re a high-mileage driver. If you have good credit and can afford the added cost, an extended warranty for your car can provide peace of mind.

However, it’s important to look at the car’s reliability history and how much you can afford for an emergency fund before deciding whether to purchase an extended warranty. In fact, financial guru Dave Ramsey recommends setting aside half of what you would spend on a warranty to handle unexpected expenses instead.

A new car is more reliable than ever, according to J.D. Power and other ratings services. It’s possible you could make it through the first few years without an extended warranty, especially if you drive your car gently.

If you’re looking to save money, consider getting a used car with a few years left on its factory warranty, or buying a certified pre-owned vehicle. Many of these have an extended powertrain warranty that’s similar in terms and conditions to a manufacturer’s extended warranty.

You can also research third-party extended warranty providers. They offer plans ranging from an exclusionary bumper-to-bumper warranty to basic powertrain coverage for the engine, transmission and drive systems. The prices and benefits of these plans vary widely, but competition among third-party providers can keep costs low. You can often get a quote online or over the phone and then choose the plan that best suits your budget and needs. You can pay upfront or roll the warranty into your auto loan to spread out the cost. The dealer or a third-party provider will often handle the paperwork for you. You’ll want to know if the warranty company will pay your repair provider directly or if you need to wait for reimbursement. In some cases, the warranty provider may reimburse you for up to $125 a day while your car is in the shop.

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