If you’ve ever bought a used car before, you’ve probably run into this question: should you buy that extended warranty or not?
It usually comes at you from left field, when you’re finalizing paperwork and financing with the dealership’s salesperson. They might say, “Oh, and you want the warranty, too, right? It’ll save you thousands on repairs if your car ever breaks down, so I’ll just add this to the total, right?”
Well, before you follow his/her lead with a quick nod, or immediately say no because you’re wary of being taken advantage of, take a deep breath and think about it.
It may be a bad idea. Or it may be a great idea.
The only way you’ll know if buying a warranty on a used car is the right thing to do or not, is by asking questions and paying attention to the details. Now let’s talk about how you do that.
What is a Used Car Warranty?
First thing’s first: there’s a distinction to be made here. What you might think is an extended warranty is more than likely something else entirely.
Generally speaking, true warranties are included in a vehicle’s sticker price. If the “extended warranty” is an additional cost, then it’s not really a warranty at all, but a service contract.
The warranty and service contract basically offer the same protective guarantee, but the contract simply extends the coverage beyond the original warranty’s limit.
Why is this important? If you’re buying a used car with a manufacturer’s warranty, the first thing you need to do before making the purchase for extended coverage (or foregoing that option) is to check out the car’s mileage.
If the original warranty covers the vehicle for tens of thousands of miles beyond the current odometer reading, then buying additional coverage may just be a waste of money.
If, on the other hand, you only have 3,000 miles left on a 70,000 mile warranty, picking up the service contract may save your bacon.
Choosing whether or not to buy the additional service contract shouldn’t be a snap decision.
Take the time to fully understand what’s being offered to you.