Do you need an extended auto warranty?
A very good question.
Let's say you plan on keeping a car long after its
original warranty expires. Should you purchase an extended service
contract? Answering these questions might help you with your decision.
- Do you hate surprise expenses, especially costly auto
repairs?
- Will the cost of replacing a pricey electrical part or air
conditioner or transmission bust your monthly budget? Or do you have a few
thousand dollars tucked away in an emergency fund for just these kinds of
expenses?
- How long do you plan on keeping the car after the original
auto warranty expires?
- Would you sleep better at night knowing that certain major
repairs will be covered under an extended service contract? Or would you
rather risk it and pay for repairs when and if they are needed?
You should also consider your car's reliability. On the one
hand, new cars are more reliable than ever, so car owners can expect fewer
repairs. On the other hand, repair costs, while infrequent, could be quite high,
thanks to the complex electronics and computer circuitry under the hood.
Suppose you plan on keeping your car for several years and an
extended service contract appeals to you; there's still no need to buy it when
you purchase your new car.
You can buy an extended warranty a week, a month, even years
after you purchase a new car if you want.
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