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Is a Warranty Worth it for a Used Car

Sure, if you spend your hard earned money on a used car, you want to protect your investment. However, is an extended warranty a smart buy for a new-to-you used vehicle? It doesn’t matter if you purchase a new or a used car, the dealer is likely going to try to upsell you on the benefits of an extended warranty. It’s important for you to take the time to research the make and model of vehicle to decide if an extended warranty is really worth it or it it’s cheaper to cover the costs of regular services and repairs on your own.

Here’s a few things to consider before buying an extended warranty on a used car…

1. What’s your story?

Take a good long look at your current lifestyle and needs before you decide to shill out for that extended warranty. For example, do you commute. If so, consider the amount of mileage currently on the vehicle and how much more the warranty covers. If there’s not much mileage left over, an extended warranty may not be worth your money.

2. Are there restrictions on services and repairs?

By this I mean does the warranty restrict you from taking your car to be serviced by your own mechanic. Many extended warranties have a list of approved dealers and they’ll only cover the repairs if they’re done by the branded service centers on this list. And typically those “approved” dealerships charge more for parts and labor then your local garage. Maybe it’s cheaper to get your car serviced by your local garage vs. paying for the extended warranty.

3. So, is it worth it in the end?

When you purchase an extended warranty on any product, you’re virtually taking a bet that the costs of services and repairs covered under warranty will be less than you’re paying for the initial warranty. If it’s not, then it’s not worth your hard earned money. So look at what the warranty covers and the duration to judge what the estimated repairs and services needed over that time will cost. Of course it’s an estimate, but as an alternative, you could set aside a certain amount in car allotted savings to pay for your own repairs and services.

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