Should you buy an extended warranty?

Answer

For a car... if and only if you know nothing about cars and have a lot of money. In general an extended warranty is nothing but pure profit for just about any business. This is the reason employees make so much commission from selling extended warranties.

It's best to buy an extended warranty.

Buying An Extended Warranty

Here are opinions and answers from WikiAnswers Contributors:

• Dealers may try to sell you a extended warranty (also known as an auto service contract) when you buy a new or used car. A warranty comes with a new car and is included in the original price of the vehicle. A service contract or extended warranty is sold separately and is a promise to pay for certain repairs or services. Service contracts are usually high-profit add-ons, costing hundreds to more than $1,000. If you want to get the additional coverage you can always negotiate the price of the extended warranty www.adviceontime.com is a good source of info. The service contract may duplicate warranty coverage you get from the manufacturer or dealer. Ask these questions: Does the dealer, the manufacturer, or an independent company back the service contract? What happens to your coverage if the dealer or administrator goes out of business? How are claims handled? Can you choose among several service dealers or repair centers or do you have to return to one dealer? Is your car covered if it breaks down on a trip or if you move out of town? Do you need prior authorization for repair work? Common repairs for parts like brakes and clutches generally are not included in service contracts. Watch out for exclusions that deny coverage for any reason and other terms that could cost extra when repairs are made. Failure to keep up manufacturer's recommendations for routine maintenance can void the service contract. The contract may prohibit you from taking your car to an independent station for routine maintenance or performing the work yourself.

• You must ask yourself how long do you keep your cars. If your history shows that you keep a car on average 3-4 years then you are fine under the Factory Warranty. You may purchase the Extended Service Plan any time up to the end Of the Factory warranty, but you must pay cash at that time. If you want to "Finance" at possibly lower rates you must do so at Time of purchase.Factory Warrantys(Ford, Chevy etc) are more $ than "After Market" but will cover you Nationally.

• If you are buying a new car and only going to keep it for 3 years then no. But most people buy used then i say YES. Answer this question would you rather pay $1500 out of your pocket for 1 repair or a couple bucks every month and not have to. Plus the work being done is by a mechanic that only works on those type of cars so it will more then likely done right. Also how many times have you brought your car somewhere and they found things wrong and you said ill do it later so then you drive around with a annoying problem which then leads to another problem. When you could've got it done for free. Also most dealerships will give you a loaner car to drive while your car is being fixed!

• I was an underwriter for an extended warranty company for two years, and I would suggest never buying one. The car dealers who sold them left out valuable information and gave out lots of misinformation when selling them to customers. Nine out of ten times, customers were calling to have them cancelled becuase they did not do what they were told they would do. They were 5 or 6 different types of warranties that fit depending on what type of vehicle you were buying, was it new or used and what the mileage is on the vehicle. The newer the vehicle the more money the dealer is going to get out of it, so regardless they sold the "new" one and when the customer went to use it they would find that there was not coverage for what they needed repaired. If you take the amount of money you are paying into your payment every month that is for the warranty and put it into your savings account you would have the money set aside when something does happen, then you don't have to go through the hassle of waiting while the warranty company decides if it is covered while your vehicle sits in a shop waiting to be repared.

• I've been in the car business for 19 years. First as a mechanic, then in new and used car sales, and now for the last five years as a Fiance Manager in a new and used car dealership. If you KNOW that you will not keep the car past the factory warranty, then don't buy the extended warranty. However, if you drive higher mileage, keep a car longer than the factory warranty, or if you're buying a used car, then an extended warranty is probably for you. Since most Americans live paycheck to paycheck, the idea of putting money away for mechanical breakdowns is unrealistic. I deal specifically with people's credit and I see a lot of problem areas due to uncovered, and unaffordable mechanical breakdowns that could have been avoided with the purchase of an extended warranty. Make certain the warranty company you choose is nationally known and usually insured by an even larger mother company.

• Not all warranties, but definitely GAP insurance.

First answer by FCIC. Last edit by Reebo. Contributor trust: 17 [recommend contributor]. Question popularity: 301 [recommend question]