When you are about to conclude a contract of this kind, be prepared for the situation waiting for you in the premises of the Finance and Insurance (F&I) officers where your contract is to be completed. The people working in that office, particularly the manager will do their best to convince you to buy any of the products they are offering such as theft recovery systems and paint protection for your car. However, the greatest thing they will try to convince you to buy is the extended warranty. The extended warranty comes in when the standard new car warranty, aka bumper-to-bumper warranty expires. Extended warranty covers all potential costs for car repair and is good option because it balances these costs which can vary. Furthermore, this extended warranty can be bought after and before the expiration of the standard new car warranty, but please note that if you buy it after the expiry date of the standard warranty it is highly likely that this extended warranty will be far more expensive. When buying the standard car warranty you have probably thought of some options and potential issues. Now, it is time to think about the same, but in terms of extended warranty.
Warm-up: You will keep the car for a long time?
This is a question that the F&I officer will probably ask and a question that you definitely should think about. If you tend to get bored of your car very easily and get rid of it after only let`s sat 3 years of driving it, then it is illogical to think about owning an extended warranty. But, if you are a kind of guy that will drive the vehicle for 10 or more years, then extended warranty may not be such a bad idea. In this text you will find several questions that you may take into consideration.
1. Who is Responsible for the Warranty?
When buying and extended warranty it is very important to find out who is actually offering it. If sellers offer a third-party warranty then you should check the background of the company. You should also know that every dealership on the territory of U.S. is offering a manufacturer- backed extended warranty. If you are looking for a particular coverage that the manufacturers does not offer, then you should check other customers` options and experiences regarding this particular coverage.
2. Have You Shopped for the Best Price?
The research about price and other details is not to be done when entering the F&I office nor should you ask the F&I officer that kind of questions. After you have asked the F&I officer about the price then you can politely go out and start calling other dealerships and compare their prices with the one you have been offered. If your F&I manager tells you that the amount you should pay for the extended warranty is fixed and he/she is not to have further discussions on the topic, don`t trust her/him! There are some dealerships that will voluntarily agree to negotiate or just lower the price. If your negotiating skills are a bit rusty take a look at “ace negotiator” and learn few tricks.
3. Do You Know What is Covered by the Warranty?
When reading the extended warranty offer, be sure that you have read everything carefully and you have paid attention to every detail. You should particularly see if you have any deductible and if you have, what is its amount, see how the repair payment is scheduled, are you the first to pay the bill which you will later have reimbursed or vice versa. Furthermore, pay a special attention to the parts covered with the warranty. Sometimes, for example tires are partly covered so you will still have to contribute with certain additional amount.
4. Is it OK If You Don`t Buy It?
You are to decide. If you don`t buy it and afterwards you don`t stop thinking about it, then you should consider buying it from the beginning. There is nothing worthier then calm conscience. But, if you are not very into this and it just crossed your mind once or twice then you may skip the extended insurance. However, if you are doubtful about this we have some advice for you. If you are looking for a new car to go to the website, click “Reliability” after you have inserted the name and year of the model you are looking for and start searching. If you want to buy a second hand car, you can do that on this website. Of course, there is the possibility of not finding the particular model you are looking for, but Edmunds forum is a good place you can turn to in order to get answers on your questions and hear different opinions and experiences. You can also vices Consumer Reports website or consult their print version in order to find different reliability offers and different car models.
5. Check Your Repair History?
Before deciding about whether to get the warranty or not think about your car`s history concerning technical problems. Take into account different types of warranties. For example, if your road back home is rough or full of stones then there is high possibility for having a flat tire. But, if you can`t think of the last time you had such problem, then maybe you don`t really need the road-hazard insurance. You should also calculate the amount you have spent on out-of-warranty repairs. Then compare this sum to the total cost of the warranty. Finally, you should be aware that you will not be facing the same problems with different cars, but if you buy your cars from the same manufacturer, you have a solid base of what you may rely your expectations.
Bonus: Do You Really Need This Extended Warranty?
F&I managers may sometimes insist too much on how much you need this extended warranty and you feel kind of obliged to buy it. But, that is generally not the case. The results of the J.D. Power study conducted in 2011 show that most of the car users do not need this extended warranty. This survey has been conducted on annual basis since 1990 and according to the data the auto industry`s vehicle reliability improved for 8% in the past 10 years. However, if you are a kind of person who do not want to take even minor chances then maybe you should buy this extended insurance, but when you do, always have in mind to ask the right questions.
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