![]() ![]() The club recommends that used-car buyers factor in how long they plan to keep the car, how many miles they drive annually, and whether they can afford to pay for repairs out of pocket. This helps keep the cost down, and you can get a greater selection of longer coverage terms.įor those driving used vehicles, usually the best coverage options are for vehicles with under 80,000 miles. The best time to purchase protection for newer vehicles is while they’re still under the original factory warranty, according to AAA. And the small print truly matters, because aftermarket programs have specific limitations on what repairs are covered and where the work can be done. The plans can vary in length of time, what they cover, and price. They’re available through dealerships, auto clubs, and insurance companies (which sometimes call them mechanical breakdown insurance). ![]() If you do want to purchase an extended warranty, remember that the price can be negotiated, just like the purchase price for the car.Įxtended warranties may reduce financial stress, particularly for those who own models from unreliable brands. And if that money isn’t needed for repairs, it can go toward the purchase of the next car. Instead, Ramsey recommends that owners create an emergency fund for repairs that they can tap into when needed. If you can’t afford to repair your car, then you can’t afford the car.” “I don’t recommend buying extended warranties, ever. That’s the reason people sell them, because they make a bundle on them in commissions,” says a money expert and radio talk show host, Dave Ramsey. “The fact is, extended warranties are overpriced. This isn’t surprising, because extended warranties make a lot of money for those who sell them. But beware: A CR member survey conducted in 2013 showed that car owners typically paid more for the coverage than they got back in direct benefits. No matter the exact type, extended warranties are an investment in peace of mind that limits financial risk for a set period of time. ![]() (Read about Honda extending its certified pre-owned status to 10-year-old cars.) These are typically included with certified pre-owned cars sold by dealerships, along with an extensive inspection. Vehicle service contracts, often referred to as extended warranties, are a tempting option for consumers who buy a used car or for those who want to extend the bumper-to-bumper coverage on a new car. But for many shoppers, even knowing which cars are trustworthy isn’t enough. Car buyers crave reliability: 95 percent of new- and used-car shoppers rank it high when choosing a car, according to a national survey conducted by Consumer Reports. ![]()
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