You’ve likely heard of an extended car warranty before, but do you feel confident in making an educated decision on whether or not it’s right for you?
Many of us have experienced the discomfort of being presented with products that we don’t know anything about. Empower yourself to make an educated decision by doing the research before you enter a dealership. By asking yourself the following five questions, you can rest assured you’re well-equipped to consult with your local dealership on which product is best for you.
Who stands behind the warranty?
Your extended warranty options will likely fall within one of two categories – it’ll either be branded as backed by the auto manufacturer (i.e. Hyundai, Mazda, BMW etc.) or a third-party company.
We all want to feel like we can trust the company we’re purchasing a product from – whether it’s a fridge, television, home insurance or any kind of warranty product. To make sure you have the necessary confidence in the brand and product before purchasing, be sure to review the company’s website to get a sense of their approach to protection products. If you have any doubt, ask your financial services manager for their opinion at the dealership.
Have you shopped around?
If you walk into the dealership blind – meaning, you haven’t done any prior research – it’s unlikely that you’ll be in the best position to decide on which extended warranty is best for you.
Think about the number of times you’ve looked at a product in a store and pulled out your smartphone to check reviews, learn more information or compare it to a competitors’ product. Well, shopping for an extended warranty should be no different. When it comes time to decide on an extended warranty, you’ll likely be sitting face to face with a financial services manager. Naturally, this isn’t the best time to do your extensive research. Instead, you can use this as an opportunity to ask any outstanding questions from your research.
Do you understand the coverage?
Unfortunately, purchasing an extended warranty product doesn’t mean that any work you need done on your car will be covered. Make sure you understand what’s covered so you’re not disappointed at your next service appointment. For example, most wear and tear parts aren’t covered under extended warranty. What do we mean by wear and tear parts? Think: parts that are expected to eventually wear out such as windshield wipers or the brakes.
Additionally, there are often different tiers of protection that you can purchase, depending on your needs and budget. Talk to the financial services manager about the difference between each level, and don’t be afraid to ask questions if something isn’t clear.
Take the time to read the fine print to determine what’s covered, if you’ll be required to pay a deductible in the event you need to make a claim, and if the repairs are fully covered.
Does it fit your lifestyle?
Do you plan to keep your vehicle past the expiration of the manufacturer’s warranty? (See our blog on the difference between extended warranty and manufacturer warranty). Are you buying a used vehicle? If you answer yes to either of those questions, then an extended warranty product could be a great option for you.
Do you have a sense of pricing?
Buying a vehicle is often the second most expensive purchase the average person will make in their lifetime (a house is the first). With that in mind, it’s important that you shop around to explore pricing to ensure you’re getting the best deal. That said, the lowest price certainly doesn’t mean the best option as there are different levels of coverage as mentioned above.
At the end of the day, your goal should be to put yourself in a position to ask the questions you need answered in order to feel good about your buying decision. Take advantage of the resources available to you online, as well as in person with the financial services manager at your local dealership.