When you go to a dealership to buy a new car, you’d be hard-pressed to find a place that didn’t offer some kind of warranty on the vehicle you purchase. In fact, it’s a topic that dealers are more likely to bring up, as buyers just subliminally expect to have some kind of warranty on their new vehicle.
However, warranties are definitely something prospective new car buyers should look into before purchasing. Furthermore, you might be doing even better if you look for an extended warranty.
What Exactly Does an Extended Warranty Do?
The first thing to understand is that technically, all auto warranties are offered by the manufacturer. The warranty your new car comes with falls under this category. An extended warranty might be offered by the manufacturer, but more often than not, the independent company you’re working with is making that offer.
This actually makes “extended warranty” a type of misnomer; what you’re really agreeing to is an extended service contract. These service contracts cover things above and beyond what your bumper-to-bumper warranty does.
However, while we can assume certain things about our bumper-to-bumper warranties – such as the fact that it doesn’t cover our tires and brakes – the terms get much more complex when discussing extended warranties.
Regular warranties cover your car for a certain number of years or a certain number of miles – whichever comes first. One of the reasons we don’t inquire about them seriously when buying is because they are just that generic.
Extended warranties are more tailored to what the manufacturer or dealership is willing to throw in to make the deal sweeter. Therefore, you absolutely have to read the fine print to know what kind of repairs and maintenance you’re getting.
Extended Warranties: The Pros and Cons
So, should you go for that Dodge Ram extended warranty? It’s key to remember that extended warranties cover your vehicle after the manufacturer’s warranty has expired. If you buy new vehicles regularly, or are frequently tempted to trade in, paying extra for an extended warranty probably isn’t worth it.
On the plus side, if you plan to stick with this vehicle, you can use the extended warranty as a bargaining chip. Because extended warranties vary so much in what they cover, this allows you the opportunity to ask for what you want in an extended warranty. Pick the auto-related woe that worries you most – Needing roadside assistance? Tire rotation? – and ask for it.
Also be advised that your extended warranty (service contract) won’t apply everywhere you go. If you buy that warranty from a third party company, you’ll have to have the vehicle serviced at one of their approved locations to get the savings.
If you want to hang onto your vehicle until it’s positively done, don’t already have a favorite mechanic, and don’t want to be hassled by repairs and failures, an extended warranty might be a good idea. As computers and tech equipment in auto manufacturing become increasingly common, repairs get costlier. It all comes down to how much a risk taker you are, or to be more direct, how you personally deal with a surprise transmission problem. Can you afford to be caught off guard?