When you purchase a new car from a dealership, you will be offered a new car warranty to add on to the manufacturer’s warranty that comes with the car. It can be a tough decision to choose between paying the often expensive price for the extended warranty and declining to save the cost but perhaps being more exposed down the line. Don’t let the salesperson intimidate you into buying the new car warranty if you don’t want it – do your research and be clear on your plan before you walk through the door.
Three Points to Help in Deciding on a New Car Warranty Purchase
Look at the Manufacturer Warranty First
All new cars come with some sort of manufacturer warranty as part of the purchase price. Look closely at what kind of coverage that warranty includes, as it might be enough to sufficiently cover you depending on your plans for the vehicle. A standard new car warranty is 3-years or 36,000 miles, but in recent years some manufacturers have started to offer longer plans to entice buyers. If your car comes with something in the 5-6 year range, you probably won’t want to spend the extra money for the warranty coverage to extend beyond that. A car of that age will have nearly 100,000 miles on the engine, and a car of that age doesn’t need to be covered by a warranty.
Consider Just Saving Money
If you buy the warranty plan, that money is spent whether you ever use the warranty or not. However, if you pass on the warranty but put an equal amount of money aside in a separate savings account for vehicle expenses, you will have it if you need it. If you come into a spot where you need to complete serious repairs on your car, you will have the money available to do so. If that day never comes, you obviously still have the money and can use it for whatever purpose you like.
Find Out if It’s Negotiable
Some state laws require service contracts to be standard prices across all consumers, while other states allow for these contracts to be negotiated. If your state allows for bargaining on the price of the warranty, ask about getting a break in order to seal the deal. The salesperson might be willing to move some on the price of the warranty just to get you to sign on the dotted line. If this strategy works out, you can get the comfort of the extended warranty without the steep price that many of these warranty plans come with.