Factory vs. Extended Auto Warranties
When you buy a new car off the lot or order one direct from the factory and you sit in the cab for the first time and take in that wonderful new car smell, it doesn't seem like anything could ever go wrong with it. It's so new and so sparkling clean that it is hard to picture it ever being anything else. Yet at this time when we are completing the transaction and buying cars, we also get asked if we would like to buy an extended warranty for the vehicle, whether it's a good old-fashioned pickup truck or a new flex fuel and E85 hybrid vehicle. For most people this is a head scratcher.
You want to protect the car and all of the money you have invested in it, but at the same time you don't want to get overextended or buy something you really don't need. Should you buy an extended warranty for a vehicle? There is no simple universal yes or no answer to this question, just like trying to choose which national auto insurance company to choose. Instead there are some pretty basic things to think about and questions to ask that can help you come up with the right answer and make the correct choice on your own. This is something to decide before you get to the dealership.
Extended Warranties are Not Warranties
The first thing we need to clear up is this basic misconception about extended warranties. You see, they are actually not really warranties at all. A warranty by definition is something that is already included in the price of something that you buy. So, an extended warranty should really be called an extended service plan. But with that being said, it is useful to think about some things and find out some answers when you are thinking of extending your warranty.
What is Covered and Not Covered
Find out what is covered by any warranty as well as what is not covered. This includes specific lists of what parts are covered and so on, and specific lists of what parts are excluded in the same way. Also, get specifics on deductibles, and find out if that same deductible apply to all dealerships, or if you have to take the car back to the place of purchase, as is commonly required with these service plans.
How Long You'll Keep Car
Another thing to think about early on that can really clear up everything is how long you are planning on keeping the car or how long you think you'll probably have it. If you are going to probably get rid of it or trade it in before the factory warranty ends, there is no sense in buying an extended warranty. If you are unsure, find out if the warranty is transferable. It could be a selling point for you if you do go to sell.
Information on Warranty Servicing Company
It is also important to find out who us backing the warranty. In some cases it is actually the manufacturer or the dealer. But in other cases it might be some other third party. This is a significant difference simply because of the potential of difficulty in getting claims straightened out and paid like they should be.
Get all of this information and just ask general questions and you can really find out some good information on an extended service plan for a vehicle. Some people swear by them and get them with every car they ever buy, and others avoid them at all cost. Maybe you are somewhere in the middle when it comes to factory vs. extended warranties. Again, there is no universal right or wrong answer. It is just good to know the facts so that you can decide.