Extended car warranties cover repair costs after the manufacturer’s warranty ends. Plans are available for both new and pre-owned vehicles. Extended warranties are valuable for people who want to budget for car repairs in advance. Often one major repair can cost enough for the warranty to pay for itself.
On the other hand, if the reliability record of the automobile that you’re buying is strong, potential repair cost savings may not justify the price of the extended service contract. These warranties also may not make sense for buyers who tend to trade cars every few years.
Once you have decided whether an extended warranty makes sense for you, there are many options to help you find the best coverage at a competitive price.
Automobile dealers frequently offer extended auto warranties from the car’s manufacturer, such as Chevrolet or Toyota. However, warranty shoppers can also find online quotes and information from many third-party warranty companies. For example, Warranty Direct and CarChex provide details about coverage and instant quotes on their websites. Motor Trend magazine recommends a company called Easy Care as a best buy for extended warranty protection.
AAA, the well-known auto club, also offers warranties. The AAA extended warranty not only covers your car repairs, but also offers traditional auto club benefits, such as rental car coverage while your car is being fixed. If you have a warehouse club membership, check to see if the club offers extended car warranties. Costco and Sam’s Club often have deals with competitive pricing and comprehensive coverage.
To avoid the risk of an insolvent warranty company, check ratings by insurance rating firms, such as AM Best, before purchasing a warranty. Also check the Better Business Bureau’s online ratings for companies you are considering. Determine whether there are convenient service locations in your area as well as areas where you frequently travel. Ask about claim processing time, and research online ratings from customers. If it’s important for you to choose which repair shop performs your repairs, be sure to ask if you can select the shop, or whether you must use repair locations designated by the warranty company.
You may choose to buy an extended warranty when you buy your car, but many companies also allow you to buy coverage later. Whichever option you choose, research and careful consideration of your needs will help you get the most for your money.