My Car Quest

June 29, 2022

Are Extended Warranties on Older Cars Worth It?

When you buy a new car, it comes with a manufacturer’s warranty. This is a guarantee from the vehicle manufacturer that they will shoulder the repair for specific problems. A broken air conditioner or a stalled engine are examples of repairs covered by the manufacturer’s warranty. Usually, the contract lasts for three years or until your car reaches a certain mileage.

If your vehicle has seen its share of miles, or if it is older than three years, the manufacturer’s warranty has most likely lapsed. Without a service contract, you must shell out for repair costs. If you’re worried about the extra cost of repairs, talk to your dealer about getting an extended car warranty.

An extended warranty is an optional service that functions similarly to the original guarantee from your manufacturer. It is an aftermarket product. Most likely, you are in contract with a third-party provider instead of the automotive company itself. The best extended car warranty has decent coverage and reasonable prices, even for older vehicles.

5 Reasons to Get Extended Warranty on Older Cars

Extended car warranties can cost between $1,000 to $5,000, depending on the features and coverage. This additional expense may be worth it under certain conditions.

1. Peace of Mind

If your vehicle is essential to your everyday life or livelihood, an extended car warranty can give you peace of mind. Instead of worrying about shelling out a huge amount for repairs, you pay the modest warranty fee upfront.

2. You Can Save Money

The warranty cost can pay for itself and more if you encounter a pricey repair bill. Modern cars have numerous complicated components—electronics, sensors, computers, automated parts, and more. When these parts turn faulty, the cost of replacement and repair can hurt if you don’t have a warranty in place.

3. Custom-fit Coverage

Most extended warranties have flexible coverage, so you might not need to pay as much. Sometimes, the manufacturer’s warranty on your engine lasts longer than the bumper-to-bumper coverage. In this case, you may ask your dealer or provider to exclude the powertrain from your contract. If you plan to buy a new car in two years, you can negotiate for a lower cost on a two-year warranty than an annual coverage.

4. Added Benefits

Extended vehicle warranties come with added services. Most providers give 24/7 roadside assistance and towing services to customers in need. Some may even go the extra mile and throw in guaranteed reimbursements for rental vehicles. You’re guaranteed to not be car-less while yours is in the shop for repairs.

5. Your Car is a Collectible

If you have a vintage vehicle, you should spend all you can on increasing the value of your collectible. A special warranty on classic cars is a form of extended service contract. The difference is that the vintage vehicle warranty focuses on maintaining value rather than just functional repairs.

3 Reasons to Skip Getting Extended Warranty on Older Cars

It’s better to skip getting an extended warranty if the costs outweigh the benefits. Some of the drawbacks of extended vehicle service contracts are the following.

1. Limited Coverage

Extended car warranties do not cover everything. It may cover even less than your manufacturer’s warranty. Check the contract carefully for any critical exclusions and exemptions and ask questions before purchasing. If you think the coverage is not worth the cost, skip it.

2. Limited Facilities

Some extended warranties limit your choices of where you can have your car repaired. You might need to say goodbye to your favorite mechanic if they are not in a warranty-approved shop. If you don’t have a nearby accredited repair center, fetching your car might be a hassle.

3. Mileage Limits

Aftermarket service contracts may sometimes put a mileage clause in the contract. Instead of paying for the repair of a part in full, the warranty will only cover part of the cost based on the car’s mileage. If your vehicle has acquired a lot of miles, you’ll most likely have partial coverage only.

Weigh the Pros and Cons

There’s no definitive answer to whether you should get an extended car warranty. It will depend on your car’s condition, your maintenance habits, and how you drive. If you depend on your vehicle for your livelihood, an extended warranty combined with good car habits can save you from a costly impact on your business.

You can avoid expensive repairs by diligently maintaining and driving safely. If you’re already doing this, chances are you won’t even use your extended warranty before it expires. Instead of paying thousands of dollars for a product, it’s better to have an emergency repair fund. If you don’t use the savings for repairs, it can go to funding your new car.

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