When it comes to car buying, having a bit of extra coverage in the form of an extended warranty can really provide peace of mind. But what kind of service contract should you opt for to cover your used car?
Knowing What You Need
Every car has different needs throughout its life. When it comes to coverage, policies vary – so it’s important to know what you’re getting.
Consider what you use your car for. If you’re constantly on the road, it’s wise to consider an extended warranty that covers more than basic mechanical breakdown, such as a policy that covers wheels and tires. On the other hand, if your vehicle only sees occasional use, you might want to skip the extra cost of a service contract and set your savings aside in a repair fund.
Another factor in determining your coverage needs can come down to the vehicle itself. Did you purchase a used car that’s known as a reliable ride? Do other consumers report trouble when the car hits a certain age or number of miles? You can research what previous owners have said about your make and model of vehicle on sites like Consumer Reports. Remember, investing in a reliable vehicle from the start can help save you money down the road.
Points to Remember When Policy Shopping
Now that you’ve considered your car and driving habits, the conclusion may be that an extended warranty is right for you. Here are some things to know before you sign up:
- Policies aren’t one size fits all. Make sure the systems that are likely to need repair are the ones that are covered. Know specifically, because a policy that covers a used car “from bumper to bumper” might not include things like wheels, electrical systems, or part failures in safety systems.
- Who’s got your back? Make sure you know if your policy is a manufacturer-backed warranty, dealer-backed, or covered by a third party. Manufacturer-backed coverage typically allows you to go to any franchised dealer for service. Dealer-backed and third-party coverage usually only allows you to return to a specific dealership or authorized repair shop.
- Are you footing the bill? Some plans will pay for services directly, while others require you to pay out of pocket before issuing a reimbursement. No matter what, there are typically deductibles involved – and just like with insurance, that amount can vary with the policy.
Remember, there are pros and cons to any plan – the key is to get the coverage you need.
Are You in Need of a Vehicle?
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