Is Extended Warranty worth it?
Figuring out whether an extended warranty is worth it can be a bit tricky, especially with a wide range of sources all saying different things. We have created a simple guide of things to think about so you can decide for yourself whether an extended warranty is worth it or not.
1) How old is your vehicle?
Not all vehicles are eligible for an extended warranty. The manufacturer’s warranty typically lasts between 3 – 5 years and varies per make and model, so you want to check that out first.
There are also benefits to purchasing an extended warranty straight away on a new car.
2) What vehicle do you have?
Some vehicle makes are more expensive to repair than others. For example, luxury brands such as BMW, Jaguar and Mercedes might cost you more in car repairs compared to non-luxury vehicles.
Although maintenance costs include other items aside from car repairs that are not included with an extended warranty, such as an oil change, you might find the graph below interesting (in US dollars, from YourMechanic.com).
3) Is your car used?
Although used cars are more affordable, some people are concerned that they don’t know how the previous owner treated the vehicle. For example, what kind of a driver were they? Did they always properly maintain the vehicle?
Some drivers, therefore, think an extended warranty is worth it because you cannot predict when you might need expensive car repairs, and for a small extra cost you can be covered.
4) Do you worry about the cost of car repairs?
The cost of car repairs is a worry for some drivers, regardless of whether their vehicle is new or used, and having a sudden and unexpected bill could be a big problem. Whether you want to protect your savings, or whether you just want to make sure your bills all get paid, an Extended Warranty policy might be for you.
5) Where will you buy the Extended Warranty policy?
Whether an extended warranty is worth it or not also depends on the price you paid for the policy and the coverage that comes with that. For example, the traditional purchase point of Extended Warranty is at the dealership. This is an expensive method of purchasing Extended Warranty for a variety of reasons such as;
1) large commission fees on the sale of a policy
2) you might be persuaded into adding the policy into your monthly payments (which hides the total cost)
However, with Obvi.ca you can now go directly online for Extended Warranty and GAP Insurance, saving up to 70% compared to the dealer and giving you better coverage. At Obvi, we think Extended Warranty is worth it, but only when you can buy online in your own time whilst fully understanding what you are buying and when the price is fair.