When purchasing a new vehicle, you must make several decisions in a short period. One of those considerations is whether or not you want to purchase an extended warranty.
What Is an Extended Car Warranty, and How Does It Work
Let's get out of the way right away: Almost all new cars come with a limited warranty that covers you for the first three years or 36,000 miles, whichever comes first, of ownership. An extended warranty may be proper for you if you're ready to pay a little more for the convenience of not having to worry about the cost of unexpected repairs for a little longer. But calling it a "warranty" isn't entirely accurate. An extended warranty is just an additional insurance policy that protects you from having to pay for costly repairs for a set period or a set number of miles. Typically, extended warranties add a couple of years to the usual warranty period. Most extended warranties are provided by the automobile, truck, SUV, or van manufacturer. Original equipment manufacturer (OEM) extended warranties are policies like this. You probably have an OEM extended warranty if your extended warranty is covered by a well-known brand that built your vehicles, such as Ford, Honda, or Audi. Aside from that, there are two more forms of OEM extended warranties:- Any artistry defect that causes your engine or transmission to fail will be covered by a powertrain warranty.
- A limited warranty (also known as a bumper-to-bumper warranty) covers almost everything else in your car, including the technology features and infotainment system, but not routine maintenance or items that wear out quickly, like tires and windshield wipers.
- Another option is a third-party extended warranty, such as one provided by the car dealership where you purchased your vehicle. "Aftermarket warranties" are the name for these warranties.
Why Would I Want to Get Rid of My Extended Automobile Warranty
The most common reason customers purchase an extended warranty is because vehicle dealerships push them to do so. It's difficult to resist this temptation, and it's too simple to focus on the risks of not obtaining the coverage rather than the benefits. Despite this, having an extended warranty is usually not a sound financial decision. According to Consumer Reports, the median cost of an extended warranty is over $1,500; most buyers don't use it, and those who do wind up spending more on the policy than they would have if they had just paid for the repairs themselves. Suppose you bought an extended car warranty on the spur of the moment. In that case, you might be expecting to reverse your decision and invest the money wisely.What is the maximum amount of money I may get back if I cancel my extended warranty
If you bought anything on impulse, you usually have 30 days to cancel your extended warranty without penalty. 5 If it's been longer, you should be able to cancel and receive a prorated refund based on the period that has elapsed and the mileage that your vehicle has accumulated since then. For further information, consult your contract.How to Terminate Your Extended Automobile Warranty
Unfortunately, dealers who offer you an extended warranty earn a commission, so they're not likely to rush to help you cancel. If you have a weak constitution, bringing a pushy and outspoken friend with you to the dealership or calling to cancel may be beneficial. To cancel your extended auto warranty, you must fill out a form specifying your mileage and the cancellation date and obtain a signed copy from the dealership. Don't be scared to phone every couple of weeks to remind them to process the request.How can I be sure I don't make the same mistake again
You can almost always wait until your original OEM warranty is about to expire before deciding whether or not to acquire an extended warranty. Of course, they won't tell you that at the vehicle showroom, but if you know what kind of automobile you want, you should do some study beforehand.Most Commonly Asked Questions (FAQs)
How do I avoid getting calls about extended car warranties If you're getting many calls about extended warranties for your car, they may be scammers. You can report these calls to the FCC by filing a complaint, and the agency will take appropriate action. When you trade-in your car, what happens to your extended warranty Some extended warranties can be transferred to the new owner when you trade-in or sell your car. Check your warranty agreement's provisions to see if your warranty is transferable or if it would be canceled in the case of a change of ownership. When should I get a car warranty extension An extended warranty can be an excellent way to have peace of mind about your car, but it's expensive. Ensure you thoroughly investigate your options and understand which forms of warranty coverage make sense for you before buying a car. If you purchase an extended warranty, do it before the standard warranty ends. The cost of an extended warranty could rise if you wait too long.