If you’re planning to buy a used car, you may be asked if you want to buy an extended warranty for it.
While this can seem like a good idea in some circumstances, it isn’t always worth the expense. Here we look at the pros and cons of taking out an extended warranty on a used vehicle.
The benefits of an extended warranty
After the manufacturer’s warranty has expired, you may consider taking out an extended warranty on a used car.
The advantages of this are that you gain the peace of mind of being able to cover the cost of certain repairs to your vehicle for the period of the warranty. Your used car could prove to be troublesome, and a warranty is a way to avoid risk.
However, you need to read your policy carefully to understand exactly what it covers. You’ll find that a manufacturer’s extended warranty generally has fewer exclusions than those from third-party providers.
For example, inclusion warranties only cover specific parts and aren’t as comprehensive compared to exclusion warranties that include all parts except for ones that are named.
It’s also a good idea to look into the reputation of the company that’s providing the warranty.
The pitfalls of extended warranties
Whilst it might be reassuring to have an extended warranty, they can come at a high price. And it still won’t necessarily cover everything that could go wrong.
And, of course, you could find that the cost of the repair required was less than the price of the warranty. Or you may never need to use the warranty.
Interestingly, according to a Consumer Reports survey, 55% of respondents who bought an extended warranty didn’t use it. Plus, only a quarter of survey participants said they’d buy one again.1
Should you buy an extended warranty on your used car?
It might be difficult to justify the expense of taking out an extended warranty on a used car. You could end up spending more on the warranty than on the vehicle repairs.
Instead, it can be more economical to simply put aside the money that may be required for car repairs. That way, you’ll still have the reassurance of knowing that you can afford to pay for any maintenance.
An exception to this may be if, for some reason, you have a car that you know is going to require some work. In which case, it might be worth finding a suitable warranty – one that you are sure will cover the issues your car is likely to experience.
However, if you’ve bought your car from a reputable dealer, and it has a reliable track record, there's no point in spending money when your car probably won't have any issues.
At Foster & Heanes we have over 20 used cars, and we offer a three months’ warranty to provide reassurance that we’ll take care of any immediate problems.
Would you like advice on your used car?
Foster & Heanes offers car servicing, maintenance and repair for all makes and models of vehicles including classic and vintage cars. We can arrange free collection and delivery if you live near our Fleet or Dogmersfield service centres.