About Extended Car Warranties
You know the feeling: your car is no longer under manufacturer’s warranty and, while driving to work one day, you hear a new noise coming from the engine compartment. Immediately you wonder if this is a minor issue, or it’s going to bust your monthly budget or worse -it doesn’t take much of a problem with a car to cost many hundreds of dollars these days.
Warranties buy you “peace of mind”
Let’s face it, owning a car when it’s “under warranty” is a pleasant time. No matter what the issue is, you can have your local factory repair center take a look at things and if something does need repairing, chances are the factory warranty will cover it for you. Manufacturers know that this peace of mind is great for car owners because it soothes the unknown – the unknown of an expensive, budget-busting repair bill.
Here’s a sobering financial fact. The AAA says the average American household spends $3,269 on car maintenance per year. That seems like a lot doesn’t it? Well, cars nowadays are not the simple machines they used to be. New vehicles are loaded with complex technology and lots of electronics. Because of this, not only have cost of repairs skyrocketed, so has the cost of just diagnosing the issue. The average cost to repair an air conditioning system for example is $825 these days. Over the next five years repair costs are going to increase about 12% per year. That $825 air conditioner repair today could cost as much as $1,500 to repair just a few years from now.
A solution is to extend your car’s warranty
The manufacturer’s factory warranty typically covers vehicles for an initial period of time that is usually a shorter period of time than you will own your vehicle. Third-party service contracts, also known as “Extended Warrantees”, offer protection against mechanical and electrical failures after the manufacturer’s warranty runs out.
How they work
Extended warranties are packaged in a similar manner to the original warranty offered by the manufacturer. You can purchase a set number of miles or a set number of years, like 30,000 miles or 3 years. You are provided with a list of local repair shops that you can go to, and the rest works similarly to how factory warranties work. You won’t need to worry about what things will cost, or if the repair shop is overcharging you because everything is taken care of. That’s the great part of having an extended warranty.
Should you buy one?
It is not uncommon for automotive journalists to play down extended warranties. They claim that today’s cars rarely need service until they accumulate tons of miles and get pretty old. During this time, the manufacturer’s warranty will cover you just fine. Well, there is some truth to this, but, if something does happen, and extended warranty can save your neck when the manufacturer’s warranty runs out. Here’s the bottom line: you don’t need an extended warranty, nobody has to have one, but does it buy you peace of mind? If it does, then it’s worth what you pay for it. Being able to sleep at night is a nice feeling.
Article Courtesy of: Milnes Ford