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10 Myths on Extended Car Warranty Under the Spotlight

Sarah Pritzker
10 Myths on Extended Car Warranty
When buying a car, you’re likely to hear the term “extended car warranty” at some point. One of the main concerns people have when they purchase a vehicle is how they’ll handle paying for the inevitable repairs that are likely to spring up.

Car repairs can be very costly. The various warranties available say they’ll protect you if something goes wrong. Is it worth investing in an extended warranty on your vehicle? Which type of warranty is worth your money? Should you purchase a warranty directly from your dealer, or can you get a better deal elsewhere? How can you avoid being taken advantage of? In this guide, we’ll clear up some of the most common misconceptions about extended car warranties. 

Let’s take a look at extended car warranty myths, one at a time:

1. I don’t need an extended car warranty

Often, drivers may think that because their vehicle is currently in good condition, they don’t need to worry about spending money on an extended warranty for it. Remember, while your vehicle may be in good shape now, there’s no way to know what issues could pop up down the line. Similar to health insurance, if you wait until your car encounters a real problem, your car won’t be covered for anything deemed a pre-existing condition. The right time to get the extended coverage of a warranty is before your car actually needs it. If you care about protecting your car, make sure you have extended coverage in place on your car before problems arise.

2. Only a car dealer can sell me a warranty

While only a registered dealer can sell you an extended vehicle warranty, there are major providers around the country who can sell you a vehicle protection plan. What’s the difference between the two? A vehicle protection plan is a more affordable option for many customers, and provides you with many of the benefits of an extended warranty. 

A vehicle protection can also offer no-fee payment plans, and in some cases may even cover additional issues that arise from normal product use. Different providers around the country can offer packages that will better suit your needs with some really attractive terms. It’s worth shopping around to compare plans and costs. 

3. All warranties are basically alike

This is a common misconception, but learning the differences between types of warranties is a must. There’s a range of different plans out there, and it’s wise to do your homework to learn what kind of warranty you really need. Warranties vary in terms of coverage, benefits, features, and cost. 

A costlier warranty will typically provide you with additional coverage. Coverage types also differ based on which state you live in, as well as the year, make, model, and mileage of your car. See if you can get a free quote so you can make an educated comparison. And don’t forget to research the reputation of the provider to be sure you’re buying your coverage from a company you can trust. 

4. If I’m already covered by a manufacturer’s warranty, why would I need double coverage?

True, a manufacturer’s warranty provides you with coverage for a short period of time after you buy your car. But those time and mileage limits quickly run out, and if problems are going to arise, they’re likely to happen after that warranty expires. 

When you purchase an extended warranty plan before your car’s manufacturer warranty expires, you’ll be able to lock in far better rates than if you had waited. A newer car without issues is easier and cheaper to insure under an extended warranty. You won’t get nearly the same deal on an older car you’ve been driving around for a few years. So do yourself a favor and look into an extended warranty before you think you need one. You’ll get lower rates, better terms, and a higher level of coverage. 

5. Getting an extended warranty means I don’t have to worry about my car

An extended warranty is not a replacement for responsible car ownership. While a warranty will help deal with repair costs, you are still expected to care for your car according to the guidelines of your vehicle owner’s manual. Be sure to go for scheduled maintenance checks, and don’t forget to save records and receipts for upkeep and repairs. 

If you neglect your car, you may not be eligible to have your claims paid should something go wrong. Even with a warranty, you’ll want to avoid trips to the repair shop. The best way to do that is through consistent upkeep. 

6. To qualify for dealer financing, I have to buy an extended warranty

There’s no connection between purchasing an extended warranty and being approved for financing. Whether you qualify for financing depends on your credit history. What’s more, if you tack the fee for an extended warranty onto your car purchase, you’ll wind up paying that much more in interest. Look into one of the companies selling extended warranties offering interest-free payment plans. You’ll do better in the long run. 

7. When getting my car serviced, I should expect no out-of-pocket cost 

Even with an extended warranty, you’ll still be laying out some of the cost of repairs. If you have a manufacturer extended plan, you’ll often be asked to pay a deductible. Generally, a car under manufacturer extended warranty must be serviced at the dealership, and they’ll use factory parts to repair it, which can be better quality and come at a higher price. 

Other costly surprises include calling in an adjuster who comes in to confirm the repair diagnosis. This usually happens when repairs cost $1000 or require extensive work. An adjuster will cost you time and money. You may also be asked to pay for your vehicle to be brought back into the shop as well. Don’t forget paying for diagnostic time spent assessing the damage, as well as labor costs. 

8. An extended warranty covers the same thing as my original manufacturer’s warranty

This is simply not the case. Extended warranties, or service contracts, don’t cover maintenance, such as tune-ups, coolant, wipers, bulbs, oil changes, brake and transmission flushes, or bulbs. They also don’t cover items that get worn out, like tires, brake pads, and rotors. It’s good to think of an extended warranty going hand in hand with an original manufacturer warranty, as the two can often complement each other. The extended warranty tends to cover mechanical and electrical problems that aren’t covered by the manufacturer’s warranty. 

Read the fine print and don’t be afraid to ask questions to find out exactly what you’re paying for. Review your service contracts carefully, and find out whether you’re purchasing the level and type of warranty you need. 

9. Wear and tear breakdown warranties and mechanical breakdown warranties are the same thing 

Mechanical breakdown is defined as a defect in the car’s parts or workmanship as it was supplied by the manufacturer. The defect renders the car part unable to function as it should. If your warranty only covers product defects and malfunctions, you’ll want to strongly consider a wear and tear breakdown warranty as well. Most of the time, breakdowns happen because a part wore out or deteriorated gradually, and not because of faulty manufacturing. Over the years, and as the miles add up on a vehicle, this only becomes more of an issue. 

Therefore, you should not make any assumptions about your repair agreement covering the car repairs you may need over time. A service contract that includes wear and tear-related claims is your best bet for covering many of the repairs your car is likely to need. 

10. Extended warranties are a waste of my hard-earned money

What’s the major reason drivers opt out of getting an extended warranty on their vehicle? For most drivers, the answer is cost. An extended warranty offer can feel like a red flag for a customer. It can lead you to wonder whether you are being taken advantage of, or sold something you’ll probably never need. Nothing could be further from the truth. If your car has ever needed a major repair, you know that many repairs can cost thousands of dollars. Your warranty will likely pay for itself if you have one major car repair bill. 

Another thing to bear in mind is that some extended warranties come with helpful perks like roadside assistance should your car break down, payment plans to make repair costs more manageable, a replacement rental while your car is being fixed, and the ability to choose which repair shop you use. 

There are some very attractive plans out there that are reasonably pricedת and not all of them require you to pay a deductible. It’s worth shopping around to find a plan that’s really worth your money. 

To sum up, extended car warranties are similar to health insurance and life insurance. You hope you won’t need to collect on your policy, but should the unexpected happen, you want to know that your coverage is there to protect you. 

As with all policies, it’s crucial to do your research to make sure you’re getting the best deal. Don’t make any assumptions based on the experiences of other people you know. There are major differences among extended car warranty plans. Make sure you read the fine print so you’re not taken by surprise when you find out what is and isn’t covered by your plan. 

You rely on your car to get you where you need to go. Make sure you have a coverage plan in place so you won’t spend a fortune getting your car repaired if you encounter a problem. You’ll be glad you did. 

Sarah Pritzker
Sarah Pritzker writes for top10.com and is a content writer with years of experience and a keen interest in the vast world of online consumer products. She enjoys helping readers make sense of the options on the market in a variety of fields.