Car Buying – Extended Warranty: Do I Need It Or Not?

If you are a new car buyer and are new to the whole idea, then you should definitely read up on warranties, standard car warranty and extended warranty, etc. You might also ask many times, should I buy an extended warranty?

If you ask the car dealer this question, the most probable answer that you would get is, "Never buy an extended warranty." This is very wrong advice. The value of an extended warranty mainly depends on two very simple factors:

1. The price
2. The limits of the warranty coverage

Sadly, the blanket statements given by the dealers would never tell you the whole truth about car warranty. They always advise you to never go for auto warranty or auto extended warranty. For example, If you are offered an extended warranty that covered every single item of the car for a full term of 5 years and at a cost of $50, would it be a good buy? Check out websites like WarrantyDirect.com, Autos.yahoo.com and eBay.com for details on cars and the warranties.

How about a car warranty or an extended warranty that only covered the windshield wiper motor, lasted 1 year and cost you $1,000? Almost like the value of any purchase, its worth is relative to the price and the usage. In the above example, the truth about the auto extended warranty lies somewhere deep within. In any case, an extended warranty offering good coverage at a reasonable price is a good bargain if you use it. An auto warranty that offers limited coverage and costs an arm and a leg is certainly a bad buy, whether you use it or not.

Take a look at the table given below (courtesy Edmunds.com) that lists the warranties and the coverage provided.

• Basic – It covers everything, except items that are subject to wear and tear like oil filters, wiper blades, etc. Tires and batteries would be covered by their own warranties and emission equipment would be covered for 2 years or 24,000 miles.
  
  
• Drivetrain – This coverage takes into account the movable parts like the engine, transmission, etc. Most internal parts of the engine would also be covered by the warranty.
  
  
• Rust – This would protect you from rust-related issues and cover your car.
  
  
• Roadside Assistance – Mostly all dealers would give a free service of rescuing you if you happen to be stranded on a highway with a breakdown. This might be covered in the auto extended warranty.

It is better to go for an auto extended warranty any day, as it would give you a wider coverage than an ordinary car warranty that would never be needed when you buy a new car.