Extended Warranty Aftermarket Car Warranty
The Need for Extended Warranty
A car warranty, that is provided at the time of purchase of a new car, is akin to a guarantee by the
manufacturer to provide remedial measures like repairs and replacement free of cost, for a certain period of
time, provided the repairs are not on account of negligence on the part of the owner. Vehicles come with a
bumper-to-bumper factory warranty, emissions warranty, tire warranty and body rust and corrosion
warranty. Sometimes, emergency roadside assistance may also be a part of manufacturer's warranty. Once
the expires, the buyer is no longer entitled to these benefits. Since car maintenance can be expensive, the
need for used car warranty arises.
Types of Extended Warranty for Used Cars
Extended used car warranty, that can be purchased from a dealer, covers the cost of certain repairs that may
be required after a car's factory warranty expires. Extended warranties can be broadly classified into two
categories: manufacturer's warranty and aftermarket car warranty.
Manufacturer Backed Extended Warranty: This warranty is an extension of the factory warranty. A car
covered under the manufacturer backed warranty entitles the owner to get his car repaired for free, provided
certain conditions are satisfied. The biggest advantage of this type of warranty is the facility to get the car
repaired by any dealer. One can choose a bumper-to-bumper warranty or a specialized warranty that covers
transmission, engine and other which may cost a great deal of money to repair or replace.
Aftermarket Car Warranty: Aftermarket car warranty is provided by an independent company. Aftermarket
car warranties are typically more expensive as compared to manufacturer backed extended warranties. In
fact, the extended warranty may be restrictive and may not allow the buyer to get the car repaired by any
dealer. Many times, the owner of the car is expected to pay upfront for the repairs with the assurance of
reimbursement at a later date. However, the repairs may not be approved. Consequently the owner may have
to bear the cost of , despite purchasing an aftermarket car warranty. Generally, dealers offer aftermarket car
warranties that have a very high mark up cost. Hence, a manufacturer supported warranty is a better option.
Factors to be Considered while Purchasing Extend Warranty on Cars
Mileage: High mileage on the car would makes it difficult to obtain an extended warranty. In fact, most
companies refuse to provide extended warranty on cars that have more than 100,000 miles.
Cost-Effective: The age of the car is an important factor that determines the cost of the extended warranty.
Since automotive repairs increase with age, the cost of purchasing extended warranty also escalates with the
passage of time. Hence, it may not be sensible to obtain an extended warranty on a very old car.
Selling the Car: In case a person has decided to sell the , in a few years time, it may not be prudent to opt for
an extended car warranty. This is because most extended car warranties expire on selling the car.
Sometimes, extended car warranties may be transferable to the new owner for a fee.
These are some of the factors that may influence the owner's decision to purchase an extended service
contract. Although extended car warranties may provide peace of mind to the owner, it may be unnecessary
in case of reliable cars. Again, in case of old cars that have been driven around quite a bit, extended
warranty may not be cost-effective.
consumer reports used cars