How to Purchase an Extended Warranty for a Car

Purchasing an extended warranty for a car is a great way to protect one of the most expensive items you will ever own. Extended warranties do exactly what the term implies, they extend your coverage beyond the manufacturer's warranty to protect you in case of a major mechanical failure. There are many features to extended warranties and some important items to consider as you purchase one.

Instructions

1

Understand that purchasing a car warranty is very similar to buying insurance. The cheapest option is not always the best option. So while it is perfectly acceptable to look for a good deal, don't purchase an extended warranty based on price alone. Shop around both online and at the dealer and compare features and prices.

2

Understand what is covered. Car warranties tend to use terminology that the average consumer doesn't understand. For example, most warranties will cover failure of the drivetrain, but do you know what that is? Make sure the seller clearly identifies, in plain language, the parts covered by the extended warranty.

3

Understand what is not covered. Extended warranties don't cover anything that isn't listed in their covered items. Because they often do not list the items not covered, ask in advance whether certain parts are covered. Also understand that certain car parts are made up of many other parts, such as a transmission. A warranty may cover a major transmission failure in general, but not if the failure is due to a stripped gear.

4

Understand the difference between a mechanical failure (which is covered) and a usage failure (which is not). Warranties are intended to repair items that fail prematurely. Since all parts of a car will wear out eventually, you need to know how the warranty defines "mechanical failure." It can differ very much from your own views, so get this cleared up before you purchase the extended warranty.

5

Most extended warranties are offered at time that you purchase the car. This can be a great way to purchase the warranty because you can use it in your price negotiations for the car.

6

If the warranty has already expired on your car and you want to purchase a new extended warranty, you can purchase a warranty from a third party provider. Often a warranty provider other than the dealership will offer lower prices.

7

Understand that some cars will not qualify for an extended warranty, including vehicles that are known to break down frequently or are extremely expensive to repair. However, you won't know if a car will qualify until you apply for warranty quotes.