There’s always the fear that your vehicle will break down at just the wrong time. Right when the kids need braces, or college tuition bills come due, or the hot water heater explodes, the car is on its way to the repair shop for some astronomically-priced procedure to replace a part you’ve never heard of that does something you didn’t even know your vehicle could do. This is the scenario that automotive sales managers want rushing through your head when it comes time for that popular question, “Would you like the extended warranty on your vehicle?” They use terms like “Full Coverage,” “Wrap,” and “Comprehensive” to make you believe that you’ll be safe and secure, never having to pay for repairs for as long you’re within your warranty’s mileage and time limits. If only that were the case.

There are definitely advantages to having an extended warranty; however, as many people who’ve purchased these add-on contracts can attest, there are also drawbacks. We’ll give you a bit of a rundown on the good and bad of extended warranties so that you can decide for yourself if it’s something that’s truly to your benefit.


1.) Expensive Repairs Right When You Can’t Afford Them

It’s called Murphy’s Law. Anybody who doesn’t have a leprechaun in their back pocket has most likely been subjected to it at one time or another. Right when the flood gates open and money starts pouring out of your bank account for various expenses, the car breaks down. The beauty of an extended warranty is having a bit of comfort in knowing that most of the really expensive repair jobs are going to be covered. Many extended warranties will cover powertrain (engine, transmission, and drive axles), fuel system, suspension, steering, and electrical. These are the areas where some of the most expensive repairs can take place.

2.) Factory-Certified Technicians and Parts

If you’re buying your extended warranty from the dealership, then the dealership is the best place to take it for repairs when it breaks. They’ll have all the information already, and you’ll be familiar with the people there. This provides you with the comfort of knowing that factory-trained technicians will be working on your vehicle, using dealership parts. Even if you’re out of town and your vehicle decides to break a leg (and not in good way), most warranties will allow you to take the vehicle to any of that particular manufacturer’s dealerships for service.

3.) Transferability

This is a big highlight for if you plan on selling your vehicle before the warranty expires. Some warranties maintain transferability, meaning the new owner will not only be purchasing your vehicle, he/she will be purchasing a warranted vehicle. That could allow you to recoup some of the money you originally paid for the added protection.


1.) Coverage

Unlike your manufacturer’s bumper-to-bumper warranty, there is going to be a whole slew of items which are not covered by your extended warranty. Every warranty is different, so coverage can vary from vendor to vendor, but you will find several areas that your manufacturer may have covered that your extended warranty will not. Some of these can include; belts, hoses, fuses, lights, paint, upholstery, electrical parts, exhaust, brakes rotors and drums, and the battery.

2.) Repair location

While having your dealership do all your warranty work does provide a realm of quality and familiarity, what if the warranty company wants only that dealership to do the work? Some warranties do require the work to be performed at the dealership where the vehicle was purchased. This negates the value of the warranty should you ever move out of the area or have a falling out with the dealership.

3.) The Gamble

An extended warranty is no different than auto insurance; sometimes you have to use it, sometimes you don’t. You may get through your entire warranty with a gem of a vehicle that decides to never break once – until the day after the warranty expires, of course. Just keep the gamble factor in mind when seeing the price of your extended warranty. Is it a price you’re willing to pay if the only thing you may get in return is peace of mind for a while? Or, is it a price that you’d rather set aside in a bank account for if the vehicle should ever need a costly repair?

That’s really what it all comes down to – the gamble. Everything mechanical is eventually going to break down; nothing lasts forever. The part you’re betting on is how often it may or may not happen with your vehicle, and how severe the repairs may be if it does. There are some extended warranties out there that are well worth the peace of mind with their extensive coverage and low purchase price; others should be steered well clear of. Sometimes it just comes down to a choice of comfort, and a roll of the dice.

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