Auto Warranty - How does it work?
The Basics of Auto Warranty
Extended car warranties help protect you from the costs of expensive vehicle breakdowns. Essentially, the warranty is a contract between you and the warranty provider — the manufacturer or a third party — that states the provider will help cover the cost of repairs following a breakdown.
When your factory car warranty expires, it's a good idea to look into an extended car warranty,
What does an extended car warranty cover?
The Main Points
The key with car warranties is that they only cover manufacturer defects. In other words, they only cover parts that fail entirely on their own during normal, everyday driving. Car warranties do not cover failures due to damage, bad weather, abuse or lack of maintenance.
Is an extended car warranty worth it?
A warranty is not a complete guarantee that all parts and repairs will be covered. The warranty plan covers only some parts in cases, and it's important to find the right plan for your vehicle. We think an extended warranty might be worth it under the following conditions:
You drive a vehicle with below-average reliability: If your vehicle has cheap, infrequent repairs, you’re probably fine paying out of pocket. But, if you plan to purchase a brand not known for its reliability, an extended warranty may be a wise investment.
The cost of the warranty is less than the expected cost of repairs: Look at the expected annual cost to repair your vehicle and multiply it by the years you plan to own it. Is the cost of the extended warranty significantly less? If so, it might make mathematical sense to invest in one, even if it doesn’t cover 100% of expected repairs.
You don’t mind paying for peace of mind, even if you never file a claim: Some folks just sleep better knowing they're partially protected against surprise repair bills. Just don’t make the common mistake of thinking your warranty will cover 100% of parts 100% of the time.
Unless you meet these conditions, you may save money by simply paying out of pocket for repairs instead of investing around $2,500 or more in a warranty.
Want to Learn More?
Click on the button below to get pricing, plan details and more from our partner Endurance Auto Warranty.
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