If you have just purchased a used car and now you are thinking of buying an extended warranty, you need to proceed with caution as extended warranties are enormous moneymakers for the car dealers and anyone else that can sell them. One simple wrong move could cost you hundreds of dollars, even thousands if you are unlucky.
First of all, do not let anyone pressure you into signing an aftermarket used car warranty before you are 100% ready and you are certain that you need one. An extended warranty is in fact and extended service contract that covers the cost of certain repairs and problems after the car’s factory warranty is no longer available.
Before you take into consideration purchasing this type of warranty, we recommend that you take a closer look at the vehicle’s original warranty. There are many automakers today that offer above and beyond the once standard 3-year / 36,000 miles protection. Cars sold by Mercedes, BMW, Lexus, SAAB, Jaguar, Cadillac, Volvo come with a 4-year / 50,000-miles warranty. Infinitis have a 4-year / 60,000 miles warranty while Kia and Hyundai offer 5-year / 60,000 miles warranty. In some cases, like the example of the Kia Cee’d, they offer a 7-year warranty. Most of these warranties are transferable to the new user of the car, but not all of them so make sure that you check this out.
You need to know that an extended aftermarket warranty from an independent company will cost about 50% less in comparison to the same warranty sold by the manufacturer. However, the quality of this type of contract varies greatly from one company to another. If you are willing to assume these risks while at the same time saving some money, you need to figure out what kind of coverage do you want.
Most people prefer a bumper-to-bumper warranty that covers most of the parts of the car or a specialized warranty that will cover the engine, transmission as well as other parts that could do a lot of damage to a bank account.
For getting an extended aftermarket used car warranty you must be eligible for this service. Most of the companies will not insure your vehicle if it has more than 100,000 miles reading on the odometer. In addition, they will need to do a thorough inspection of the car before giving you a warranty. It is safe to say that the older the car is, the more money you will pay for the aftermarket warranty.
You need to be careful when signing a deal because there are many warranty companies out there that may include verbiage that is designed to deny specific repairs. To give you an example, some of them may write in the warranty contract that seals and gaskets are not covered. In some cases, replacing certain seals and gaskets can be very expensive. In addition, these companies may also include specific requirements for maintaining the car and if you do not meet them, they will deny covered repairs.
If you haven’t bought the car yet, it would be wise to get a vehicle history report to help ensure that the vehicle is free of defects and problems. Have your mechanic do a vehicle inspection and ask him to give you an estimate about how much it would cost you to do the necessary repairs. Regardless of the car you buy and the aftermarket warranty you are looking for, always remember to read the fine print before buying the coverage.
You need to know that these aftermarket warranties are in most cases more affordable if you purchase them early. In other words, if you decide to buy one before the car’s warranty expires, you will most like save some money. If the car’s basic warranty is no longer available and you are offered an additional 4-year warranty but you do not plan on keeping the car that long, you should think about that extending the warranty on your car will raise its resale value once you decide to sell it.
A good aftermarket used car warranty will not limit your choice of mechanics or dealers, and should cover most if not all of the possible mechanical failures covered in a regular new car coverage. The maintenance items are never covered by such warranties. It would be best to opt for a warranty that will pay for the repairs directly as reimbursement can take even months if you have to front the money for a repair.
All things considered, take your time and do a little bit of research in order to find the exact aftermarket warranty that you want for your used car. It would be wise to check with your dealer and manufacturer to see what sort of extended warranties they offer and compare them to the ones given by the independent companies.
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