Extended Warranty 101: Do I Really Need It?ReviewAdvice

Extended Warranty 101: Do I Really Need It?

An extended warranty contract is an arrangement you sign with the car manufacturer, whereby the automobile is covered for a specific period and the contract insures the vehicle on things like repairs, parts and labor – which the manufacturer will pay for when your automobile needs mechanical or structural fixing. Simply put, an extended warranty gives you peace of mind for several years because the vehicle maker handles all repairs that fall within the scope of the extended warranty arrangement.

You can purchase an extended car warranty contract when you buy the vehicle and are ready to drive it off the dealer's premises, or when the standard warranty is nearing expiration. To determine whether you really need an extended warranty, you should learn more about what the arrangement covers, who provides extended warranty services in your residence area, and where you can read warranty reviews.

What Does an Extended Warranty Cover?

An extended warranty covers numerous items. Because coverage varies by provider, talk to your service company to learn more about what falls within the warranty scope, and what does not. Having a clear understanding of coverage is important to prevent the kind of nightmarish scenario that could arise if your car needs substantial repair and you find out that the service provider does not want to foot the bill. Typical things you would see in an extended warranty are:

  • Wear and tear – This arrangement type covers parts that wear down over time.
  • Breakdowns – This policy protects against parts that break, which is not always an interesting arrangement because your vehicle's parts might not fail because of breakage but something else, say, wear and tear.
  • Technical Service Bulletin (TSB) – If your extended warranty covers TSBs, it means the manufacturer is aware that one or several conditions exist on your car and has properly notified the repair facility of the situation.
Extended Warranty 101: Do I Really Need It?

Where Can I Read Reviews on Extended Warranty Providers?

As part of your extended warranty education, you should read online reviews, especially those providing unique insights into the best warranty organizations, what to look for in an extended warranty contract, what contractual pitfalls to avoid, why the terms and conditions and fine prints are necessary, and how to make sure you receive the coverage you really need. I like Auto Warranty Today for the clarity and detail level of reviews posted on their websites. For example, on Auto Warranty Today, you can identify whether an extended warranty provider:

  • Allows a payment plan, and if yes, what type of plan as well your responsibilities under the plan
  • Is accredited by the Better Business Bureau and in line with state and local regulatory agencies
  • Provides 24/7 roadside assistance
  • Has a money back guarantee period – say, 30 or 60 days
  • Sends payments directly to your auto repair shop, or waits for you to fork over the cash before reimbursing you
  • Offers a transferable coverage option, which can be important if you decide to transfer your automobile

Do I Really Need an Extended Warranty?

Whether or not you really need an extended warranty depends on your situation, personal preference, risk profile and professional category. For example, if your job requires that you spend an inordinate amount of time on the road, an extended warranty can be helpful to curb costs pertaining to wear and tear, roadside emergency repair, and routine mechanical and engine checks. Before buying an extended warranty, you should remember that your car may still be covered under the manufacturer's warranty, so you may not even need an extended coverage plan – come to think of it. The key element to consider here is whether you think the car will suffer technological and mechanical damages in the medium or long term, just because of the way you intend to drive the automobile.

Where Can I Buy an Extended Warranty?

You can buy an extended warranty at the time of purchase, and the dealer typically would give you options that are available for the type of automobile you want to buy. Talk to the sales manager at the car dealership and ask him or her when the manufacturer's warranty expires, as well as what is covered in the extended warranty plan. You also should tour the websites and offices of companies providing extended auto warranties, such as Carchex.

On each of these websites, you typically enter your information and the car data, indicating things like:

  • First Name
  • Last Name
  • ZIP code
  • Email address
  • Primary phone
  • Secondary phone
  • Mileage
  • Model
  • Make
  • Year

After inputting the relevant data, click on "Get Quote" to see how much it would cost to cover your auto after the manufacturer's warranty expires.


An extended auto warranty covers the wear and tear that inevitably reduces your vehicle's mechanical performance in the long term. The warranty also protects you against financial losses resulting from myriad breakdowns that could occur on roads and highways. Before purchasing an extended auto warranty, figure out whether you really need it, determine what service providers are offering, and make sure warranty payments fit within your budget.

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