When buying a new car, we need to make a lot of decisions, including extended warranty. All new cars come with a limited warranty covering individuals for the first three years or (56,000 kilometers) whichever comes first. The extended warranty is an additional insurance policy that protects individuals from paying expensive repairs for a period of time.This may be comprehensive, covering any manufacturing problem and leading to engine or transmission malfunctions.There is also a limited warranty that will cover technological features or Infotainment and may not include routine maintenance.
The biggest reason why dealers buy extended warranty is that car dealerships encourage dealers to buy it. Dealers who sell extended warranty receive a good commission. It is difficult to avoid this pressure and the risk of not buying, but in all cases it is preferable to wait until the expiry of the original warranty is approaching before the trader decides whether to purchase the extended warranty.
According to consulting firm The Balance, most times the extended warranty may not be a wise financial decision.In 2018, some reports found that the average cost of the extended warranty exceeds $ 1,500, and that most buyers do not eventually use it.
According to the US nonprofit Consumer Reports, extended warranty contracts may be a tempting solution for consumers who buy a used car, but consumer surveys have shown that car owners usually pay for coverage rather than the direct benefits they receive, which is not surprising, because the guarantees are The expanded operation is profitable, noting that instead, experts recommend the establishment of an emergency fund for repairs when needed.
If individuals want to buy an extended warranty, they should remember that the price can be negotiated, just like the price of the car, explaining that extended warranties may reduce the financial pressure of those with models of unreliable brands. At the same time, it should be ascertained whether these after-sales programs have specific restrictions on the repairs that are covered, and the warranties may include other services, such as battery replacement, roadside assistance, and replacement vehicle rental coverage.