Extended Car Warranty vs. Manufacturer’s Warranty

November 16th, 2018 by
extended warranty manufacturer warranty drivers auto mart

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So you’re about to sign the papers for your brand new car and right before you breathe a sigh of relief, the salesman suddenly advises you to buy an extended car warranty to cover repairs after the manufacturer’s warranty expires. You hesitate – sure, the idea of more coverage sounds nice, but is this a good deal? Also known as a “service contract,” extended warranties can provide peace of mind to some new and used car consumers. And while, there’s no quick answer to offer, making a smart decision begins with understanding how both warranties work and what they cover.

Manufacturer’s Warranty

While all new cars come with a variety of warranties, the manufacturer’s warranty is offered on every new car and is already included in the price. A manufacturer’s warranty primarily covers big-ticket items like the engine, transmission, and drivetrain problems, although all new car warranties include a set time for bumper-to-bumper issues, referred to as a “basic warranty.” Typically in effect for three years or 36,000 miles, the bumper-to-bumper warranty covers repairs on just about everything on the vehicle, except for “wear items” – tires, brake pads, and windshield wipers. Furthermore, the bumper-to-bumper warranty doesn’t cover routine maintenance such as oil changes and tire rotation.

Fortunately for consumers, certain brands like Hyundai, Kia, Mitsubishi, and Volkswagen offer longer basic warranties up to five years or 60,000 miles, whichever happens first.

So, what happens with a car that is turned in at the end of a lease or after just a few years of being on the road? There could be some portion of the manufacturer’s warranty remaining that the next owner could take advantage of. However, in many cases, there is very little time or mileage remaining or, the warranty has expired. The good news is that there are options to keep used cars “under warranty”.

The Benefits of an Extended Car Warranty

Now that we’ve covered the manufacturer’s warranty, you might be wondering where the extended car warranty fits into all this. For instance, let’s say your car breaks down after the basic warranty has expired and then, BAM!, you’re immediately hit with a bill that you have to pay out-of-pocket. This is where an extended car warranty comes into play. An extended car warranty can be purchased at any time, although it’s recommended to buy it before your manufacturer’s warranty is up to avoid out-of-pocket surprises. Also, if you purchase it at the same time you purchase the used car, you are able to finance the cost of the warranty with the car.

Extended warranties are often bundled with various types of coverage depending on which plan is chosen at the time. A hidden benefit that some consumers may not consider is how a warranty can add to a car’s value or the policy becoming more valuable as the vehicle ages. If a vehicle already has an existing warranty, it is more likely to be well maintained and in good working condition. It is also considered to be more trustworthy and of more value to the owner.

Additionally, dealerships might sell “third-party warranties,” which generally cost less but are issued by a company that is separate from the carmaker. These warranties might require you to pay for repairs yourself and then apply it for reimbursement. That being said, it’s important to review what items are covered and how before purchasing an extended warranty.

Risk vs. Savings

At the core of getting an extended warranty, you may ask yourself – how likely is the car to break down? So if in the event of an accident, how significant will the repairs be and how big of a hit will your wallet take? Vehicles are becoming increasingly complex so researching the brand and how often their cars break down is vital. Find out how previous buyers have resolved their car troubles and what others say about their own experiences, especially on the dealership’s service after the sale. According to J.D. Power, vehicle dependability is better now than it has been in the last five years. Some consumers enjoy the comfort of knowing their new car is protected well past the manufacturer’s warranty, and consider the extra monthly expenses are worth the price.

At Driver’s Auto Mart, we offer a huge selection of used vehicles thousands of dollars below wholesale prices. Stop in our location in Davie, FL, and test drive one of our featured vehicles today!

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