There are some drivers who are convinced that extended warranties saved their butts from financial disaster. Some perceive they were buying a plan that offers no more than vibrant air. If you ever got a repair bill and for one instant doubted all the decisions that had led up to that moment, extra protection must seem like an attractive feature. However, before you sign anything, allow me to break down the reality of these warranties. Get insights.
The Pitch vs. The Truth
Extended warranties that sales reps sell sound like a magic shield that protects and shields you from any future expenses. “No surprise costs, only total peace of mind!” Read the contract, but crack open the contract and all of a sudden that comprehensive coverage has a lot more exclusions than it does benefits. A few policies omit labor, and some even omit the components that most frequently fail.
And then there is the dreaded fine print. And for something so small as missing an oil change or using a non-brand name filter, it can be denied. In that respect, some companies consider digging through a maintenance record like investigators looking for any reason not to pay.
The Pressure Sales Tactics
Have you ever gotten a letter warning that your factory’s warranty is ‘about to expire?’ Or a robotic voice telling you this is your ‘final chance’ to protect your car? The point here is to make you panic buy using aggressive tactics without getting into the details.
The worst providers will take your money, upfront and bail on you when you need them most. Others approve repairs on their own snail’s pace, processes with which mechanics must chase payment and it still sits in the shop.
When It Might Be Worth It
If you get bad cars for big dollars and experience high rates of breakdowns, an extended warranty will save your bank account. However, any plan isn’t equal. Some cover barely more than a can of WD-40 and a handshake.
Choose companies that actually pay claims without endless runarounds. You read every detail of the contract as if your wallet hinges on it, it does. Also make sure the plan does not cause the mechanics any hassle and how fast the claims are processed.
The Smarter Move
If you have enough savings to deal with an unexpected repair, then not buying the warranty might be better off. On the other hand, if the threat of a $4,000 surprise failure of the transmission would be a budget waster, then extra coverage may be a wise move (assuming the company isn’t any more skilled at evading payouts than actually covering repairs).