We’ve all been in the situation where the sales associate says “can I interest you in an extended warranty?” The opinion most people seem to have is that it’s a waste of money, until it comes to vehicles. A buyer has a very important decision to make when it comes to whether they should extend the warranty on their car. The following tips can help you make that decision.
Research the Vehicle
Vehicles (especially used) are known for having issues specific to that make and model. For example, when I bought my last vehicle I made sure to get the extended warranty due to the fact that my research suggested that the particular make and model was susceptible to transmission problems. It was worth the few hundred dollars to potentially save myself over a thousand in the years that the vehicle is covered.
Can you afford out of pocket?
Some people have savings accounts devoted to things breaking down. While this is an awesome place to be financially, if you can afford to pay the repair bill if and when the vehicle breaks down, there’s no point in paying interest on the additional dollars financed to pay for the warranty.
Going Shopping… for a warranty?!
I love shopping! Okay, I love shopping for stuff a bit more interesting than a warranty. Regardless, to get the extended warranty that’s best for you, this is a great idea. Not only do dealerships offer extended warranties, but financial institutions (such as credit unions *wink wink*) do as well. Shopping around can save you literally hundreds of dollars, so why take the dealership’s without checking it out first?
Read the fine print
As with anything that involves a vehicle, there’s fine print on the extended warranty that could disclose things like deductibles, coverage options (rental, towing, etc), and even what their definition of “wear and tear” is. You may think you’re getting a fantastic deal, but the fine print could be a deal breaker. It may be a pain, but there’s nothing worse than paying for something that could turn out to be completely useless.
Used Vehicles
You can get extended warranties on used vehicles just as easily as you can new. Dealerships are sometimes reluctant to warranty vehicles more than a year or two old; however, you can once again shop around at financial institutions (including Park!) for a warranty. Speaking of used vehicles, if you’re buying from a private party, it’s *ALWAYS* a good idea to get the vehicle inspected… even if you’re buying from a family member. Telling someone you’ll buy their vehicle pending an inspection may make them roll their eyes or think that you don’t trust them; however, it’s a very legitimate safety precaution that could save you thousands of dollars down the road or even on your first trip around the block. Most mechanics are fairly inexpensive when it comes to inspections, and having a trusted mechanic picked out already will save some time. A warning sign that you could be getting someone else’s lemon is if they decline your request to have it inspected or if you’re just getting a “too good to be true” deal on the vehicle already.
Reimbursements
In the fine print somewhere should be the payment policy regarding warranty claims. If your warranty provider requires you to pay the money up front, that’s bad news. Getting a car repaired is expensive! From rental cars to towing to even the repairs themselves, the price tag can add up fast. You may even be forced to take out a loan to cover the costs if your warranty provider doesn’t work directly with the companies involved in getting you back on the road again. Also, ask about warranty reimbursements. Some warranty providers will give you a portion of your warranty back if your coverage period expires without a single claim! That’s almost like getting a tax refund that you weren’t even expecting!
So the question of “should I or shouldn’t I get that warranty?” can only be answered by you. It depends on your financial situation, the vehicle you buy, who you buy it from, and what the warranty covers. We have advisors on staff that would be more than happy to talk to you about the entire auto-buying process, including extended warranties! Just call us at 800/626.2870.
And by the way, did you know our new and used auto loan rates are AWESOME right now? With the money you could save by financing with Park Community, you could get that extended warranty for next to nothing comparatively. 
Just throwing that out there.
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