When you buy a new car, it’s typically covered by a manufacturer warranty, usually for a period of up to three years. If you’re lucky enough, you may even get a 5-7 year warranty depending upon how new the car is and the model you’ve chosen.
This warranty gives you reassurance that if anything happens, you won’t need to spend a fortune on repairs. However, as everyone discovers when they start getting older, time can pass pretty quickly. Before you know it, that manufacturer’s warranty is over and you’re left completely unprotected. Would you be able to afford the repairs if anything were to go wrong? If not, you may want to consider taking out an extended warranty.
What is an extended warranty?
Extended warranties are much like the initial manufacturer warranty, covering the cost of mechanical and electrical breakdowns. They’re provided for a set amount of time, with many companies giving you the option to extend for 1-7 years.
Not all extended warranties are the same however, so it’s important to compare your options. Don’t just focus on the cost of the extended car warranty, make sure you’re choosing a well-known and respected provider. You’ll also want to check through all of the terms and conditions before signing any agreement.
What Are the Benefits?
There’s a few benefits that come from taking out an extended warranty. One of the main ones is the extras you’re often provided with. Some companies throw in extra cover such as paying for the cost of a hire car. This can be extremely helpful if something does go wrong.
The peace of mind they provide is also worthwhile. You’ll know that if something does go wrong, you’ll be able to cover the costs and get the car back on the road as soon as possible.
Do I Need One?
While there’s no doubt extended warranties can be extremely useful, not everyone will actually need one. You need to consider the value of your car and how much it would likely cost to fix if something went wrong. If you bought a used car for around £500 for example, and it’s quite a common model, the cost of repairs isn’t likely to be overly high. So, in this instance you could end up paying more for the warranty than the repairs would ever cost.
You may also find you’re already covered. Extended warranties are essentially a type of insurance. So, the first thing you should do is look at your existing insurance policy and what it covers. If you’re paying extra for breakdown, servicing and repairs, you won’t typically need an extended warranty.
There’s actually a way to decide whether an extended warranty would be right for you and that’s via a reliability checker. You can check online to see if your car is likely to fail. The Reliability Index gives you a good indication of which models tend to fail most frequently and how expensive they are to repair.
Overall, extended car warranties can be extremely beneficial, but it is worth checking to see whether you actually need one. Consider the costs you would need to pay out if something were to go wrong with the car. Would you be able to afford it? If not, an extended warranty could be just what you need.
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