5 Factors To Consider When the Car Dealership Wants To Sell You a Warranty

You’ve chosen the vehicle you want, agreed to the financing terms and are ready to sign on the dotted line. But before you can get to the final paperwork, the finance manager delivers a sales pitch for a car warranty . And while getting additional coverage for your vehicle sounds like a good idea, you wonder if it’s really worth the added expense.

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Here are five factors to consider before buying a warranty from a car dealership .

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What Kind of Coverage Is Being Offered

One of the most important factors to consider is what kind of coverage is being offered.

“Understand the kind of coverage, as warranties come in a broad range of forms — from powertrain and bumper-to-bumper to specialist alternatives like hybrid component warranties,” said Erin Kemp, consumer advocate for Bumper .

Kemp explained that comprehensive warranties — aka bumper-to-bumper warranties — are the best deal because they cover the most parts and systems with only a few exceptions.

“If you want almost full safety like what new cars come with, these warranties are perfect for you,” she said. “They usually cover fixes for three years or 36,000 miles. Powertrain guarantees are also very useful because they cover important mechanical parts like the engine and transmission. They usually last longer than bumper-to-bumper, for five years or 60,000 miles, which makes them a good choice for long-term security.”

Kemp said there are also specific warranties for hybrid and electric cars that cover parts like the battery, which can be expensive to fix or replace.

“This makes these warranties very useful,” she said. “If a warranty doesn’t cover everything or has unclear language, you should be wary because it could leave out important systems or have high fees. Customized plans that make it clear what’s covered and give you options for deductibles are often better, helping you get the most out of your insurance investment.”

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Terms and Conditions

Reading the terms and conditions of any warranty you’re considering is important, so you’re well aware of the limitations of the warranty.

“Read the terms and conditions carefully, since warranties usually do not cover regular wear and tear, aftermarket modifications, or problems resulting from unusual use, such as racing or excessive towing,” recommended Kemp.

Term and Mileage Limits

Kemp said that because warranties often expire based on miles first, you should consider the term and mileage limitations while also considering how much you drive each year.

Depending on your driving habits and how quickly the warranty may expire, the cost might outweigh the benefit.

Reputation of the Provider

Kemp said it’s important to investigate the reputation of the warranty provider as well. “By selecting a respectable business, dealership or a provider with a high Better Business Bureau rating, you may increase the likelihood that your claims will be fulfilled,” she explained.

Whether It’s Worth It

Kemp advised that if you’re thinking about getting an extended warranty, you should examine the financial advantages, especially for the kind of car you drive, and look into any associated costs. “These things may affect how much money you end up saving with the warranty,” she said.

She also said that a common misconception is that extended warranties are always worth the money. “However, they might not be for every vehicle, especially if it’s getting close to the end of its useful life or if the owner has enough money saved up for possible fixes,” she said.

This article originally appeared on GOBankingRates.com : 5 Factors To Consider When the Car Dealership Wants To Sell You a Warranty