If you opt to buy a used car, you will inevitably be offered a warranty from the dealer that is selling you the car. Unlike a new car, most used cars are no longer covered by a manufacturer’s warranty and you will be out on your own if you choose to pass up the warranty offer from the seller. This is one of the hardest decisions in the buying process, and one that you will want to think through carefully. Consider the following points as a way to start you decision making, and go into the sale knowing if you want that warranty or not.
Should I buy a used car warranty?
How old is the car?
A good place to start is simply thinking about the mileage and the year on the car that you are purchasing. If the vehicle is more than 5-6 years old and has around 75,000 miles or more on the engine, you probably want to pass on the warranty. You should be getting a vehicle of that age for a fairly low price, so you are going into the deal with low expectations. This isn’t a car that you should be planning on driving for more than a few years at the most, so paying for the warranty just doesn’t add up. If you are looking at a newer car with less miles, then you will have to think a little harder about this decision.
What is the track record of the vehicle
Thanks to the power of the internet, it is easy to find the records on any vehicle that you are considering purchasing. Many buyers look at the accident history to check for major damage, but you should go farther than that. Check into the service history and find out if the car has been taken in on schedule for its maintenance visits. If there is a strong record of being serviced all throughout its life, you can feel good that the car is in good condition and the warranty might be an unnecessary expense. If, however, you find that the car has not been serviced at all, the warranty becomes a wise move to protect against trouble that might be lurking under the hood.
The Repair Fund Option
If you don’t feel like spending any more money upfront than you have to on your used car, consider setting aside a special savings account for auto repair related expenses. Add a small amount of money to this fund on a monthly basis, and it will become your own sort of built-in protection. If something happens to the vehicle, you have the money on hand to take care of it. If not, you keep the money and can spend it on something else down the line.
Whatever you do, don’t let the salesperson talk you into the warranty. You should go into the purchase with a clear idea of what you want to do, and stick to that no matter what. They stand to make a nice amount of money on your warranty purchase, so they will likely push for it. Armed with some research and forethought, you can tell the salesperson what you wish to do and they should respect your decision.