Auto Insurance 101: What Does Extended Warranty Cover?
A new car is covered by the warranty provided by the manufacturer or dealerships. Your vehicle will remain covered until a specific mileage limit is reached or the warranty time limit is up.
But then you also have to think of what to do after your car warranty ends. Your car will obviously be void of coverage now, and getting a sudden automobile breakdown would be the last thing you need. The costs for repair can be expensive and stressful. It is where an extended warranty is required.
But, apart from the extension to your existing coverage, you might be wondering about what it includes. To answer your questions, Surex has made the job simple and compiled everything you need to know about an extended warranty.
What is an extended warranty?
As the name implies, an extended warranty is a contract that extends the already existing or expired warranty that the dealership or manufacturer offered.
It is optional and can be added on when you purchase your brand-new car, or you can obtain it any time before the expiration of your existing warranty. Some providers also allow for the warranty transfer if you sell your vehicle or transfer the lease or ownership to someone else.
It comes as an additional cost to the original price. It covers the replacement or repair costs of certain parts and services that the previous warranty did not cover.
What does extended warranty cover?
Don’t make the mistake of assuming that it is just as the name implies. You may think of it as an addition to or extension of your old warranty with maybe some additional services here and there.
It is not true. The services provided by an extended warranty will significantly differ depending upon your insurance carrier and the plan of your choice. It will also depend on mileage and age limitations, whichever arrives first. That is why it is essential to go through what each coverage offers to decide on the plan that aligns with your interests and needs.
You may be able to get coverage for important mechanical car components that may include but not be limited to the following:
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* The engine
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* The cooling system
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* The air-conditioning system for cooling and heating
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* Electrical systems and components
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* Airbags
You may also choose to get a comprehensive full bumper coverage for it, or you can also opt for target-specific protection for individual components.
Some providers also offer extended warranties that cover the services your previous plans employed in addition to other remaining components.
What is not covered by an extended warranty?
You need to look out for services that are not covered under an extended warranty. It will be quite a loss if you have to pay for a service or repair cost that you thought was covered with a warranty.
Generally, warranties do not cover expenses related to the following:
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* General maintenance such as changing the oil or replacing/ rotating the tires.
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* The usual damage that a vehicle can sustain such as a broken headlight, windshield, or brakes.
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* Holes and scratches in car seats and surface paint.
How much does an extended warranty cost?
Similar to how there is a wide variety of plans and coverages available, the cost of an extended warranty also differs greatly depending on the plans and who you buy it from.
Depending on the age and mileage of your car, as well as your interests and needs, a plan can cost you anywhere from $1,099 up to a couple of grand more. And the plans also range from standard to premium.
When should you buy an extended warranty?
You can invest in an extended warranty for a car within the first three to six years or up to 100,000 km from the day you paid for your car.
If your warranty has already expired or you want some added protection in your existing policy, then you can consider purchasing an extended warranty. Also, if you’re going to buy a used vehicle, then check whether it is still under an existing warranty or not. You can then decide to buy it or not, depending on the coverage and duration left.
Lastly, before purchasing an extended warranty or any other add-ons offered, check the services covered. Review your plan, budget, and ask relevant questions for further details and inquiries. It will save you from any losses or even legal problems down the road.
Is an extended warranty worth it?
After evaluating the costs and requirements for your vehicle, an extended warranty may or may not be worth it. Here’s how you can determine the same:
When you file for a warranty claim, you'll be required to pay a deductible for it, and the more intensive your plan is, the higher it will cost. Moreover, reports show that over 50% of owners that bought an extended warranty didn’t even use it for repairs or replacements during the policy period.
It would mean that you might end up paying more in claims than the actual costs.
Also, it does not add on to the years or mileage to your already existing policy. For instance, if you purchased an extended warranty of seven years on the same day you bought your car and the existing warranty is for five years, then the extension will only be applicable for the next two years.
So if you’re buying a vehicle with reliable durability and a good track record, then the extra coverage may not be needed. Or you can also save up the money for claims and use it to purchase a more durable and reliable vehicle.
Endnote
We hope you’re now familiar with what is and isn’t covered by an extended warranty. An extended warranty does offer additional protection. However, it may not be well suited for everyone. As an individual, you know your driving skills and vehicle usage better, and thus you can better determine the risk factors involved. So it should be up to you to decide whether or not to opt for it based on what it covers and the duration and limits it covers it for.
Nevertheless, if you drive long miles and use busy lanes, an extended warranty may come in handy for you to bear any potential repair costs. Besides, a couple of extended warranty years can also bring you extended peace of mind.
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