It is the same old story.
This car is a great car that will never break. But you need to buy a warranty “just in case”
If you have ever bought a car, you know the pitch. You have sat in the finance mangers office with they tell you how much you “need” that warranty.
Something that you guys may not know about me is, I have said those words. Years before I was an auto mechanic, I sold cars. That is right, I was a used car salesman. I spent about a year selling cars at Carmax. It was my very first job in the auto industry. Not to toot my own horn, but I was pretty dang good at it. Much like my job now, I was always ALL about the customer. I will save that for another post. Lets talk extended warranties.
If you listen to Clark Howard, he will tell you “Never buy an extended warranty”. He says that on everything except a car. So should you buy an extended warranty? Lets look at some pros and cons.
Pros
Here are some good reasons to buy that extended warranty
- Fixing cars can be very expensive
Not only the cost of labor, but the cost of parts can be really high.
- Cars are not getting easier to work on.
It takes thousands of dollars of tools and diagnostic equipment to properly work on cars
- Vehicles have more electronics than ever
Most modern cars have 20+ modules. That can add big dollars to a repair
- It can reduce the worry of owning a car
Do we really need more to worry about? I know I don’t
Cons
Warranties are not all hearts and flowers
- It can cost over $2000.
That is a lot of money to add to the cost of a car
- You might not ever use it
There is a chance that your car will never ever break
- Your repair might not be covered.
No warranty covers everything. NONE OF THEM! I don’t care what the sales person says
- There is fine print
It is a contract, there will be fine print!
- Like other things, may people think they are a rip off.
There is a possibility.
Considering whether to buy a warranty is a big decision. Most people do not consider it until they are having to say yes or no. If I were buying a car today, I would most likely buy a warranty. Yeah, I can do all the work my self, but I like not having to buy parts. Here are the things I would consider when thinking about an extended warranty.
- Do I have the money to make a $500-$1000 repair. I might not want to make the repair, but cars don’t break when it is convenient.
- What does it cover? Buying an “exclusion policy” is the ONLY way to go. That is a policy that will tell you what they DO NOT cover. If it is not listed, it will be covered.
- Does it cover consequential damage? Lets say the power steering pump goes out. This causes damage to the power steering rack. Will the warranty cover both parts?
- Does it cover electronics. If not, PASS! No point in buying a warranty that does not cover electronics.
- Is there a deductible? Many warranties have a $50-$100 deductible That is not a deal breaker for me. Just something to be aware of.
- Where can I get the car serviced. Some warranties only allow you to get your car serviced at certain places. Again, not a deal breaker, but something to consider.
- Will I have to pay out of pocket for the repair? The good companies will pay the repair place directly. No need for customers to pay, then hope to be reimbursed.
A better way to think of a warranty is like an insurance policy. Something to have in your pocket in case something goes wrong. I usually ask people if they are willing to put an extra $30 away for cars repairs. If the answer is no, then buy the warranty.
If you have any extended warranty questions, feel free to ask me. I have been dealing with them since 1999.
Do you enjoy the site, have you been able to learn something from reading the post, and comments here? It would mean a ton to me if you would consider sharing it. Really, it means a lot to me. 😀
