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Shopping for an Extended Warranty

Shopping for an Extended WarrantyShopping for an Extended Warranty

If you’re in the market for a used car or truck, you probably already know that shopping used is a great way to save money. Still, while used vehicles generally cost less than new vehicles, repair and maintenance costs can grow quickly after a few years of wear and tear – especially if your used car is no longer under warranty.

Fortunately, extended warranties are widely available for the savvy used car shopper. While purchasing an extended warranty can provide some peace of mind, some deals will be better than others. If you’re considering buying some additional coverage, here are some tips to help you decide if an extended warranty is right for you.

Is Your Vehicle Still Under Warranty?

If the vehicle you’re considering for purchase is relatively new and doesn’t have too many miles on the odometer, you may decide that you don’t need an extended warranty at all. Manufacturer warranties are generally transferrable. So as long as the vehicle hasn’t been in a bad accident or had some other mishap that caused the manufacturer to void coverage, you may not need an extended warranty. Check the owner’s manual of the car you’re considering to get the specifics on what the manufacturer will cover. Generally, new cars come with four types of manufacturer warranties: basic, powertrain, corrosion, roadside assistance.

A basic warranty is the “bumper-to-bumper” coverage that comes on all new cars, covering everything except fluids, wiper blades and other items which must be changed out during routine maintenance.

Powertrain warranties generally cover the engine, transmission, axles and any other mechanical gear that make the car move. Items that may wear due to environmental conditions such as belts and hoses are usually not covered by powertrain warranties, but internal parts and accessories such as the starter or alternator are usually included in the coverage.

Manufacturer warranties that cover rust or corrosion ensure that the body of your vehicle will stand the test of time. These warranties typically do not cover surface rust, though a hole in the body or frame would be subject to coverage.

No one wants to be stranded and fortunately most new cars come with some sort of roadside assistance if you’re in need. Mercedes-Benz goes above and beyond, providing unlimited roadside assistance as long as your car is serviced at one of their dealerships.

Below are some examples of warranty coverage that manufacturers provide with new cars.


Basic Warranty


Powertrain Warranty


Corrosion Warranty


Roadside Assistance











None Available











Vehicle Reliability

After you’ve researched the manufacturer’s coverage of the used car you’re considering, it’s also a good idea to research the reliability ratings for that model. JD Power provides vehicle ratings that include dependability ratings. Researching your vehicle’s reliability will likely give you some indication of whether an extended warranty purchase will be an unneeded expense or coverage that will save you money down the road.

Extended Warranty Basics

Now that you’ve considered vehicle reliability and are aware of any coverage that your car still has from the factory, you probably know whether or not purchasing an extended warranty will provide you with some peace of mind. If you’ve decided to green-light some additional coverage, here are some things you’ll want to consider before you sign up.

Who’s Covering it?

Extended warranties can be provided by either the vehicle manufacturer or an independent company, and each has some strengths and weaknesses. While manufacturer-backed warranties are generally easier to use when your car needs service, they’re also usually more expensive than those provided by a third party.

Is There a Deductible?

You’re likely considering an extended warranty so that you’ll save money down the road. For this reason, it’s important to know what your deductible is and how it’s structured. Some deductibles charge a set amount per visit, while others require that a deductible be paid per repair. A deductible that charges you per repair could add up to you paying a lot more money out of pocket if your car needs more than one thing fixed.

Will You Still Have to Pay?

Assuming you decide to spring for an extended warranty, you’ll want to know how payment is handled when you bring your car in for repairs. Some extended warranties require that you send receipts from the shop in and wait for reimbursement, meaning that you’ll have to have the funds available to initially cover the service. These types of warranties are less desirable – it’s in your best interest to look for an extended warranty that will pay the shop or dealership directly, rather than sticking you with the initial financial burden.

Know What’s Covered

Being aware of what is and is not covered will let you know how valuable an extended warranty actually is. Does it cover things like roadside assistance, towing and shop time to diagnose the repair? These are all big ticket items that can end up costing you money if they’re not covered by the warranty you choose.

It’s also important to know if there are any other limitations on your new coverage. Ask if it works in other states if you are traveling or if it will transfer to a new owner if you decide to sell your vehicle. A quality, transferrable extended warranty could carry a lot of value to potential buyers should you decide to sell your car down the road.