You have the opportunity to buy an extended car warranty at virtually any time. Some of these times may be better than others, though. Let’s look at good opportunities for buying a warranty and the factors driving the purchase.
1. When the Manufacturer’s Warranty Expires
A manufacturer`s warranty, also called a factory warranty or bumper-to-bumper warranty, typically covers a new car. If you are interested in an extended warranty, you could do so when the original car warranty expires. Factory warranties usually last three years (or 36,000 miles) to five years (or 60,000 miles). Vehicle service contracts sometimes extend factory warranties.
A factory warranty typically covers damage from parts defects or damage from shoddy workmanship. It applies to repairs occurring in the course of natural use. It does not cover regular car maintenance services such as oil changes, tire rotations, and brake pad replacements.
Sometimes, you also have a powertrain warranty that came with your new car purchase. That one might last as long as 10 years or 100,000 miles.
In any case, many car owners run the extended warranty cost numbers after their manufacturer’s warranty expires and decide to purchase an extended warranty. Extended warranties are great for peace of mind and often include roadside assistance, rental car reimbursement, and other pros.
You can choose from third-party and original equipment manufacturers (OEM) warranties. OEM warranties are from carmakers and typically cover the same things the original warranty did for the new vehicle. Third-party warranties may have a few requirements or exclusions not present in OEM warranties. For instance, a third-party warranty might want you to pay out of pocket for a repair and be reimbursed later. A third-party warranty does usually cost less than an OEM warranty.
2. When You Buy a Used Car
When you buy a typical used car is a good time to buy an extended warranty. Used cars often do not have factory warranties since these warranties have expired. Do ask the dealer about warranty information or check the buyer’s guide on the side window of the car.
Certified preowned vehicles are an exception to used cars not having warranties. CPO vehicles usually carry some type of warranty coverage, and that is included in the purchase price.
3. Anytime for Peace of Mind
If you value peace of mind, you can purchase an extended warranty anytime. It is even possible to get one when you buy your car brand new even though coverage might not start for a few more years. Peace of mind is one of the biggest benefits folks cite when they get extended warranties. You pay set amounts over time in exchange for avoiding potentially costly repairs.
4. When You Decide You Will Keep the Car a Long Time
Maybe at first, you did not plan to keep the car for more than a few years. For whatever reason, that changed. Now you prefer to keep the car for quite a while longer than you originally intended. That is a great time to get an extended warranty, particularly since the factory warranty has probably expired already. Many cars are expensive with pricey parts. An extended warranty helps safeguard against unexpected costly repairs.
That said, it is typically best to get an extended warranty while the mileage on your car is still under 80,000. If you buy an extended warranty on a car with high mileage, the warranty is likely to cost more. Consider how long you plan to keep the car, the number of miles you drive per year, and whether you can afford repairs out of pocket.
5. While the Factory Warranty Is Still Good
This may seem to contradict number one, but it comes down to your budget, needs, and priorities. If you buy an extended warranty while you have the factory warranty, then the costs are lower and you get longer coverage terms. You can also get an extended warranty that kicks in right away and covers mechanical and electrical parts the factory warranty does not.
Before You Buy
Regardless of when you buy an extended warranty, it is important to understand what an extended warranty is and is not. It might not cover routine maintenance and may have exclusions in the fine print. It does cover repairs to critical car parts and components for a certain number of years or miles.
Depending on the provider, you can choose from several levels of protection. For instance, a top-level warranty might give you extensive bumper-to-bumper protection while a midrange warranty covers steering, electrical, and brakes. A basic extended warranty might cover basic powertrain components.
As long as you have a car, you can buy an extended car warranty. Provided you have done your research and understand why you want this type of warranty, there is not a bad time to buy one. You can even purchase one while the factory warranty is still valid or wait for it to expire.