Extended Warranties: Sometimes You Really Do Need Them

Posted on: 3 January 2016

If you're buying a new or used car, you'll have an opportunity to buy a dealer services extended warranty. Unlike extended warranties for small electronics, car extended warranties can cover both general and specific issues. That means that you can pick and choose from several warranties, but whether you want to or even should choose them isn't that cut-and-dried. Evaluate the warranty offerings carefully; there are times when getting them does make sense.


Cars generally come with basic powertrain and bumper-to-bumper warranties when you buy the cars, but those warranties don't last for more than a few years. If you plan to keep the car for long past then, an extended warranty could be a very good idea simply because your car isn't going to avoid breaking down once the original warranties are through. In fact, the original warranties tend to be as short as they are because dealers know the risk of a breakdown increases as the car gets older. An extended warranty that covers the powertrain or other general issues with the car can save you a lot of money.

Plus, if you are buying a car that is known for needing more care -- maybe you have a sentimental attachment to the model, or it was the only car in the price range you were willing to pay -- the extended warranties can protect you from having to shell out too much money in the years after you get the car. If you know the repairs are coming up, and the dealer offers you warranties that will pay for the repairs (and that don't cost more than the repairs themselves), then getting the warranty is a good idea.

Budget Buster

But that does bring up another point -- the cost of the extended warranties versus the cost of the repair. If you are familiar with average repair costs for cars in your region, and the warranties cost more than the repairs would, then buying the warranties wouldn't be very helpful. Most dealerships aren't going to offer warranties like this, but you should always double-check those repair prices to be sure.

Another issue exists if the warranty covers something super-specific, especially something that you're not likely to encounter. For example, warranties against flood damage could be helpful, but warranties against flood damage from hurricanes aren't that good if you are never going to drive the car in a region that gets hurricanes.

If you're curious as to what extended warranties the dealerships in your area offer, talk to the dealerships and ask to see the warranties even if you're not actively looking at cars on their lots. You'll get a better idea of what to expect when you eventually do buy your car and you'll be able to identify the extended warranties that will be helpful to you.