If you just came across a great deal on a used car, one question you might have is: “Do I really need an extended warranty for used cars ?” The answer really depends on your personal situation, and the purchase you recently made. More often than not, used car dealers are marking up the price of these extended warranties 100% or higher. So, who is really benefiting from purchasing the warranty? But, it isn’t always this simple either. You have to ask yourself a few questions, and do some digging, before you decide whether or not the extended warranty is worth it, for the used car that you are buying.
Things to Consider When Deciding Whether You Need Extended Warranty For Used Cars
Look under the warranty hood –
When trying to determine whether or not to buy the extended warranty for used cars, the first place to begin is the original warranty on the car you have purchased. Find out how much coverage is still left on the used car. One year, two, three, five? Or, is it covered by miles? Most manufacturers today offer warranties which extend to 100,000 (plus) miles, or ten years. So, an extended warranty on a used car, that is only one or two years old, might not be the right option for you. Many (but not all) manufacturer warranties transfer to you as the new purchased; so, before signing up for the extended warranty, find out how much time (or mileage) is still covered, and if the car is covered for some time, make sure the original warranty will transfer over to you once the title is passed on to you.
How long are you planning on owning the car? –
Step two is to determine how long you plan on keeping the car. If a warranty of 5 years, or 50,000 miles remains, and you plan on keeping the car for three to five years, why would you spend additional money on extended warranty for used cars? It really doesn’t make sense to do this. But, if the car is covered for one year or a couple more years, and you plan on keeping it for 5 years, or more, then you might want to look in to the cost of the extended warranty, and whether or not it is really going to provide any benefits to you for the duration of ownership with the car in question.
Do you really need it? –
More often than not, the dealer wins with an extended car warranty purchase. On a $1000 extended coverage, the average amount vehicle owners spend on repair is about $150, which means they are simply giving away the money. If you plan on keeping the car for three or four years, and there is one year left on the original warranty, it is best for you to put the money away in savings, and simply pay for the repair work as needed.
On the flip side, if you hate unexpected surprises, and those surprise A/C repair or transmission repair jobs you would never expect, a warranty might come in handy. It really is a hit or miss decision for most. More often than not, you end up spending money excessively on the warranty, for repair work that you will never have to do. On the other hand, if one of these costly repair jobs is ever required, and you purchase the warranty, you will come out ahead.
The answer to the question of whether you need it or not, is more of a personal one, as opposed to a yes or no kind of answer. There really is no right or wrong. It depends on your personal situation, how long you plan on owning the car, how you maintain it, and other surrounding factors. Although it is usually the dealers that make money with these extended warranties, they sometimes can pay off, especially if the original warranty is almost expired, and you plan on keeping the car for several years to come.
Aftermarket or dealer? –
This is yet another inquiry to consider when deciding whether you need extended warranty for used cars. A dealer warranty will cover most major repairs, and allows you to bring the car to any certified dealer, so you know you are getting professional grade work done. The issue here is they are excessively priced. An aftermarket warranty, sold by a third party company is usually half the price (if not less), and will cover similar repairs, but the problem here is that if you don’t shop for the warranty, you might end up with less than average quality of work. So, an aftermarket warranty might seem like a good deal, but if you don’t shop around and compare, it can result in shoddy quality of work, if you get stuck with the wrong repair shop. So, do your research, compare, learn about the different warranty groups, and make your decision from there, if you do decide you are going to purchase an extended warranty for the car that you are purchasing which is in used condition.
Finding the deals –
Like any other major purchase you make, the only way to find a good deal (or at least the best deal) on the extended warranty for used cars is to shop around. There are dozens of options, warranty terms, prices, coverage options, and repair service listings. You have to do your search, you have to compare, and you have to know what each provides, in order to find the best deal, and one that is right for you.
Remember, you can’t be forced to purchase an extended warranty, and it doesn’t have to be purchased the same day you buy the used car. In many cases, you have up to a few months (60 to 90 days) to determine whether or not you want the extended warranty. So, if a sales person is trying to force you to make the decision immediately, step back, and wait a few days. Not only will this allow you to weigh the pros and cons of purchasing the extended warranty for used cars, it will also allow you to make your decision without any pressure from a pushy sales team that is simply trying to make money off you when you buy used cars.