Buying a car is one of the largest purchases people make in their lifetime. With such a significant investment at stake, it’s important to understand why protecting your investment with an extended warranty is something to seriously consider. Here are the top five reasons you should buy an extended auto warranty for your vehicle:
1) It protects your car long after the factory warranty ends.
IHS Automotive found that the average length of new vehicle ownership is now 6.5 years, an increase of almost two years since 2006. People are keeping their cars longer, driving them consistently over 100,000 miles and above. In the U.S. one out of every four cars on the road was manufactured before the year 2000!
While most new vehicles come with factory warranties from the dealership, they are limited by the number of miles or years of ownership. GM offers a 36-month or 36,000-mile factory warranty, but with the average age of ownership more than double 36 months, that leaves your car unprotected for a substantial period of time.
2) Your warranty can pay for itself after one major repair.
Let’s face it – car repairs are expensive. The computer systems in modern cars can easily cost over $1,000 to fix! By buying an extended auto warranty upfront, these unexpected costs do not have to be paid out of pocket. The cost of one major repair may be more than you paid for your entire warranty, meaning you’re saving some serious cash in the long run.
3) An extended warranty can cover perks not included in factory warranties.
Extended warranty plans can include a rental car allowance and 24/7 emergency roadside assistance to their policyholders. This extra coverage is usually not found in basic factory warranty plans. The average cost of an economy car rental is about $45 to $65 per day. This can add up quick depending on how long your car needs to be in the garage for repairs.
4) You can lock in savings on a new car.
Just like life insurance, the cost of an extended warranty increases as a car ages. If you purchase an extended warranty plan with your new car, it will cost less than if you decided to purchase the extended warranty after your factory warranty ends. If you purchase the extended warranty on a new car you’ll get more bang for your buck, as your car needs repairs over time.
5) An extended warranty can increase resale value.
If you do decide to sell your car before the extended warranty ends, the warranty is usually transferable for a small fee to the new owner. Since the warranty gives the buyer extra peace of mind when buying a used vehicle, it can increase the resale value for the seller.
Bottom Line: Should you buy an extended auto warranty?
Extended auto warranties are a great choice for the buyer who is on a fixed budget, wants to protect their investment, and not be surprised by costly repairs down the line. So, if any of those reasons sound like you, an extended warranty is a sound decision.
Just like any other type of insurance or protection program, there are different types of policies that work for different situations.
If you’re considering buying a new car, or already own a car that isn’t covered by a warranty, contact us today to see if our plans work for you.