Pros of Extended Car Warranties

When you purchase a car, the dealer willingly offers extended car service warranties.  These service contracts provide additional protection on top of manufacturer warranties and auto insurance.  Extended car warranties are a big lift for car owners using their car for the long term.  Having the peace of mind in knowing that your car is protected when it breaks down certainly helps.

However, some people fail to see the worth of the extra protection.  Instead, consumers focus on the additional cost as a burden on the high cost of cars.  If you have a thorough understanding on how extended car warranties work, you will be in a better position to make a smart decision.  Ultimately, consumer knowledge is the best solution to break the misconceptions on car extended warranties.

Types Of Extended Car Warranties

One misconception on extended car warranties is that there is only one variant of the service.  If the extended car warranty that was first offered to you does not match your needs, then you may think there are no alternatives available.  This is true for car dealers who push bumper-to-bumper extended car warranties.  These contracts may be useful for some people, but seem redundant to you.  When this happens, ask your dealer for other variants of extended car warranties.  Eventually, you will find something that will work for you.

Aside from bumper-to-bumper warranties, other types of car extended warranties include wrap warranties and named component warranties.  Wrap warranties are designed to ensure that there is no redundancy of services with pre-existing warranties.  Wrap warranties are great for car owners who want an efficient set of car warranties and auto insurance working for the benefit of their car. 

Named component warranties provide a list of car components that will be covered by the warranty.  There are many subsets under named component warranties that cover various component levels.  If your car does not qualify for bumper-to-bumper plans, named component warranty is a great alternative to cover the major components of the vehicle.

Saving Money For Repair vs. Applying For An Extended Car Warranty

Contrary to what car owners think, extended car warranties work like insurance on car malfunctions and parts that need repair.  When you pay for an extended car warranty, you are essentially paying for the right to register a claim when your car needs repair.  If your car runs perfectly well during the duration of the extended car warranty, you will not receive a refund.  This is analogous to fire insurance where the client pays his dues, even though he cannot imagine having his property on fire.  In this case, extended car warranties act as a safety net for car owners.

Some car owners suggest that instead of paying for extended car warranties, you can set aside money for car repair in a savings account, instead of allowing the warranty company to hold your money at no interest.  While setting money aside for car repair is a good alternative, you won’t get the benefits of extended car warranties such as the convenience of having someone organize the process of car repairs for you.  In the event that your car breaks down, extended car warranties have trained staff ready to take care of your car.  By buying an extended car warranty service, you have a partner to depend on when something goes wrong.  In addition, the cost of extended car warranties is lower when you buy the car and the extended warranty at the same time.  Once the cost of the warranty is added to your purchase, you do not have to think about setting aside money for car repair – something that car owners cannot do in practice.  By locking your funds to extended car warranties, you have the right to expect service from the warranty company.

Other Pros Of Extended Car Warranties

To take advantage of extended car warranties, you must be in a position to make a wise decision.  This is true for all kinds of purchases.  Do your research and search for alternatives before accepting an extended car warranty.

Extended car warranties are very helpful if you use your car for more than three years.  At this time, the manufacturer warranty usually expires, and the extended car warranty kicks in.  If you use your car heavily during its lifetime, you will save money in the long run on multiple car repairs.  Extended car warranties also have supplemental services like free car rentals during the car repair and free quotation services. 

Extended car warranty also contributes to your sense of security.  Buying a car is a considerable investment, since you will be using it for a long time.  For some people, it might be the only car they will buy in their lifetime.  Having this premium on your purchase definitely helps relieve the anxiety of losing a car due to repair costs.

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