Is a Warranty Worth It?
The next time you head to the dealership to purchase a vehicle, will you be prepared to make a decision about a warranty? It may depend on several factors, including whether the vehicle is new or used, whether you’d like the extended version, your financial situation and other personal touchpoints.
There are three types of manufacturer’s warranties. A Bumper to Bumper Warranty covers all the parts of a vehicle, minus “wear and tear.” This includes expensive electronic issues that may arise with newer vehicles. A Powertrain / Drivetrain Warranty covers your engine, transmission and other mechanical parts of your vehicle. Corrosion / Rust Warranties cover rust or deterioration that may arise on the metal. While a manufacturer’s warranty is the most common, there are also other types of warranties, including hybrid and emissions warranties.
New vs Used
When purchasing a new vehicle, consider factors like the number of miles you drive per year and how long you plan to keep it. Researching the reliability of the vehicle you are considering is also a good place to start.
When purchasing a used vehicle, there are different factors to consider. If the car won’t be reliable in the long run, a warranty will likely save you money. Again, online research may provide informative information about the reliability of the vehicle and any defects that may be associated with the make and model. It is also a good idea to have a pre-purchase inspection done by your mechanic to ensure that there aren’t any major issues with the vehicle. Keep in mind that if the used vehicle has aftermarket wheels instead of OEM wheels, this will likely increase the chances of a costly repair at some point.
Finally, consider your personal preferences. Are you willing to gamble on an extended warranty? Your investment may pay off with one single repair or you may never use it all. Will having a warranty afford you peace of mind? Or are you willing to risk paying out-of-pocket for a major repair? Will your monthly budget allow for a financial hiccup? Do you have a savings account for unexpected expenses, or would you rather pay a small deductible?
When it comes time to decide on a warranty, make sure to exercise all of the resources available to make the best decision possible for you.