Peace of mind comes at a price. If you opt for an extended warranty, consider these smart-buying tips.
Don’t buy under pressure. Dealers often try to sell the convenience of rolling coverage into a new-car loan, but that means you may be paying up front for coverage that you already have with the factory warranty. You can purchase an extended warranty after buying the car, although you may find the cost increases as the vehicle ages.
Don’t be afraid to bargain. Among those who purchased an extended warranty, only a third of our survey respondents tried to negotiate a better price for their contract. Most of those who did haggle were successful, saving about $325 on average.
Shop around. You don’t have to buy an extended warranty through a dealership. In fact, you may find a better deal through your auto club or insurance company. But consider this: Satisfaction in our survey was highest among those who bought an automaker-backed warranty.
Go all in. Our survey found little difference in cost between limited and bumper-to-bumper coverage, which is more likely than powertrain plans to include reimbursement for towing, travel expenses, and a rental car. If you’re going to buy, get the full protection.
Read the small print. Before signing, be sure you understand what is covered and where you can take your car for authorized service. Third-party warranties, especially, may have notable restrictions on approved shops. Given how many dealerships have closed in recent years, the availability of participating repair shops is a particular concern.
Consider an extended warranty for the long haul. All cars tend to become less reliable over time, so an extended warranty might be worth considering if you’re planning to keep your vehicle long after the factory warranty runs out.