When financing or leasing a car, you will have to choose the best warranty cover for your investment. A warranty cover gives you peace of mind as you can enjoy your drive confidently, knowing that you are safe from calamities. Most vehicle manufacturers usually offer limited and powertrain warranties. The powertrain is more comprehensive and covers components like engine, driveshafts, transmission, suspension, crankshafts, timing belt, and gears and pistons, among other parts depending on the manufacturer.
The sad part about manufacturer warranties is their short period and short mileage coverage. Very few manufacturers offer warranty covers that run for over five years, which brings the question; should I buy extended warranty on new car?
Whether you should buy an extended warranty on your new car will depend on the ownership type and your manufacturer’s cover duration. You will probably not need an extended warranty if you are leasing a car for two years as it is fully covered by the manufacturer’s warranty.
Nevertheless, you need an extended warranty on your car if the manufacturer’s warranty cover is shorter than the years you want to own the vehicle. This article on should I buy extended warranty on new car looks at the extended warranty benefits and cons and the options available for vehicle buyers.
Should I Buy Extended Warranty On New Car?
Before you start shopping for an extended warranty, we advise you to have a thorough look at your manufacturer’s warranty fine print and limitations. Although newer cars are less likely to need repairs, it is worthwhile to ensure that your car has full warranty coverage during your ownership.
You may not need an extended warranty if your manufacturer offers a long warranty and unlimited mileage or if the manufacturer warranty is adequate to cover your ownership contract. Nonetheless, buying an extended warranty is a no-brainer upon the manufacturer’s warranty expiry.
Pros of an Extended Warranty
- Spreads car repair costs over time – Since almost every car needs repairs every few years, investing in an extended warranty helps you spread repair costs over a long period in terms of warranty costs.
- Makes it affordable to maintain high-mileage cars – Keeping a car for many years puts you at risk of expensive maintenance and repairs. Purchasing an extended warranty for your automobile allows you to afford repairs when you need them to keep your vehicle on the road.
- Peace of mind – High-mileage cars are more likely to stall on the road than newer cars. An extended warranty allows you to enjoy your cruises without worrying about your car breaking down on the road as it accrues mileage.
- Better return on investment – Most extended warranty covers allow third-party ownership. Buying an extended warranty makes your car more marketable.
Cons of an Extended Warranty
Although the benefits of purchasing an extended warranty outweigh the cons, there are a few disadvantages you should consider.
- Usage – Some people do not keep the car long enough to use the extended warranty.
- Coverage – Extended warranties do not cover all aspects of your car.
- Overlap – Buying an extended warranty while the manufacturer warranty is active may not offer value as you may be paying for something you are already getting.
Different Types Of Extended Warranty Covers
The types of extended warranty covers vary among the issuing companies. You will most like access to manufacturer extended warranties, dealership extended warranties, and third-party extended warranties with varying terms and conditions.
1. Manufacturer Extended Warranty
The manufacturer extended warranties are available to individuals who would like to extend the original car warranty. Almost every major car manufacturer allows buyers to purchase extended cover warranty covers that prolong the repair and maintenance service beyond the mileage and years covered by the original warranty.
The extended manufacturer car warranties usually cover the same parts included in a new car warranty, but you may choose additional benefits like roadside assistance. Depending on the manufacturer and your selection, you can have an extended warranty with or without a deductible.
2. Dealership Extended warranties
Dealership warranties are the least attractive of all three types. Although they may be cheaper, they are more restrictive and offer less protection than other extended warranty options. Furthermore, most dealerships only require you to use their repair shops, which can be inconvenient.
3. Third-Party Extended Warranty
Third-party companies offer the best value with highly flexible extended car warranties. The companies offer multiple types of warranties, which enable you to choose what you need. You can customize your warranty coverage to ensure the best protection for your car without paying for unnecessary options. You also have a wider selection as most third-party warranty companies offer multiple options with different years and mileage.
Which Third-Party Company Offers The Best Extended Car Warranty Cover?
Before you buy an extended warranty coverage for your car, it is important to know what you are buying, factors that will determine the coverage, and the service provider. Keep in mind that every company and warranty coverage is unique. Some of the things you should know before choosing a third-party warranty company include:
Review fine print and contract terms to know what the warranty covers
- You may not be able to buy an extended warranty if your car has pre-existing issues
- Most warranty providers require a 30-day waiting period
- Cars with lower mileage qualify for cheaper warranty covers
That said, some of the best third-party car warranty providers you should consider in 2021 include;
Endurance is a popular extended car warranty provider with eye-catching products for newer and older cars. The company offers four warranty products; premier, secure, superior, and supreme for cars dating back to 1958 and with up to 200,000 miles. All Endurance warranty plans come with a one-year elite membership that offers several benefits such as tire repair/replacement, ID theft protection tools, and 24-hour roadside assistance.
The membership further gives you access to repair finance options of up to $5,000, key fob placement, and personal assistant. In case of trip interruptions, Endurance offers $150 reimbursement per day for three days.
It is also worth pointing that Endurance does not have a betterment clause that limits the use of parts that might improve the performance of your car. The warranty allows you to purchase a better part to replace a cheaper component.
However, the company has a consequential loss clause that means the warranty will not cover parts damaged by uninsured parts. Endurance provides 24/7 claims processing and a host of options for choosing a mechanic. The company has an extensive network with almost all dealerships and over 350,000 accepting Endurance warranty.
- It does not have a betterment clause
- It offers 24/7 claims processing
- Every product gives access to one-year Endurance elite membership
Carchex has the largest extended warranty coverage options with a total of 16 plans. The silver plan is equivalent to a powertrain warranty while the platinum option is similar to bumper-to-bumper coverage. The gold tier is for cars with about 60,000 to 100,000 miles range, but older vehicles with up to 125,000 miles can get an exception. Carchex has some of the longest terms available for a third-party company with most plans term ranging from five to ten years.
Nevertheless, it is worth noting that Carchex is not a direct provider but a broker of warranty covers. The Carchex warranty covers are by Royal Administration Services and American Auto Shield companies.
Beyond the standard plans, Carchex further offers optional coverage and additional benefits. The titanium cover has the widest selection of optional coverage, but they vary by provider. For example, the American Auto Shield warranty cover provides a $100 labor rate ceiling per hour for repair facilities and the flexibility to switch to a facility with lower charges.
The benefits also vary by the provider with the Royal company $35 reimbursement limit per workday with $175 maximum breakdown reimbursement. The American Auto company offers $40 reimbursement per workday with a $160 breakdown maximum. For roadside assistance, the American Auto covers up to $400 while the Royal Administration breakdown limit is $320.
- Optional coverage and benefits vary by provider
- It has the widest selection of warranty covers
- You can cancel policies within 30 days without attracting a penalty
3. Concord Auto Protect
Concord Auto Protect has one of the best customer support services among the warranty providers. It offers 24/7 support by email, online form, phone, and Facebook chat. Customers also have the freedom to choose any National Institute for Automotive Service Excellence (ASE) certified repair facility in their locality.
Concord Auto Protect provides three warranty tiers; premium, advance, and powertrain with enough coverage. The company also offers attractive perks and benefits. Concord has some of the highest rental car reimbursement at $75 per day for a maximum of three days and towing reimbursement at $120.
Concord Auto Protect warranty covers come with several perks that include free 24-hour roadside assistance and repair shop flexibility. The plans are also transferable and come with a 30-day money-back guarantee.
However, Concord does not have insurance protection, which means your investment will not have a cover in case the company goes out of business. It also does not offer optional coverage and the warranty contract has a consequential loss clause.
- The company offers 24/7 customer service
- You can choose any certified repair shop in your locality
- It has attractive perks
CarShield offers excellent customer service and over 30 warranty plans. The company has a cover for almost any car with less than 300,000 miles. CarShield makes it easy for new, used, or pre-owned car buyers to qualify for a warranty. The CarShield warranty covers are transferable, which can help make your car more marketable. The company is a broker and not a provider, but it offers flexibility when it comes to selecting a repair shop. It accepts any certified mechanic or repair shop for quick, convenient repairs.
CarShield warranty plans have competitive prices with most plans being under $100 a month with a maximum payment schedule of 24 months. However, CarShield has an F rating by the BBB due to complaints on poor customer service and misleading sales and advertising practices. Always read the fine print before signing up with the CarShield to ensure you are signing for what you need.
- It offers a wide range of warranty plans
- The contract and monthly payments are transferable
- It offers 24 months maximum payment schedule
5. Liberty Bell Auto Protect
Liberty Bell Auto Protect offers warranty cover for a broad range of models up to 46 models, which is more than the industry standard of about 40. The company provides three warranty covers; platinum, platinum-plus, and platinum prime. The platinum prime is a unique product in the industry as it comes with GPS navigation protection as a standard feature. Liberty Bell has attractive perks than most warranty companies.
The rental car reimbursement is above the industry average of $150 with $35 for an 8-hour workday up to $210. Liberty further offers a higher jumpstart allowance of $40 than the industry average of $30. The company further allows you to transfer a warranty up to two times per household at no cost. Other companies have a limit of one transfer per contract length or charge transfer fees.
Nevertheless, Liberty Bell has two conditions that you should keep in mind before transferring a contract. The company does not allow the transfer of a private passenger warranty to a commercial car. Furthermore, the party receiving the warranty cannot cancel the contract.
Although Liberty Bell offers a warranty for 46 different makes, it does not cover cars manufactured before 2000. The services are also not available in New Jersey, Missouri, Washington, Hawaii, and Alaska State. The company does not have additional coverage options and the warranty contracts have a betterment and consequential loss clause.
- It covers a broad range of car makes
- It allows two free warranty transfers per household
- It has attractive perks and benefits
You can buy an extended warranty for a new or used car at any time before the expiry of the manufacturer’s warranty. An extended warranty is a good investment that helps to protect you and your investment over a long period. You can buy an extended warranty from the manufacturer, dealership, or third-party company.
However, we recommend you thoroughly read warranty fine print and terms before signing the contract to ensure you have a better understanding of what the company covers and things that can make the provider avoid paying for covered parts like the consequential loss clause.