Do People Actually Buy Extended Car Warranties?

Many People Are Covered by Vehicle Warranties

If you own a car, there’s a good chance it came with a warranty.

In fact, according to a recent report from Consumer Reports, about 63 percent of new cars sold in the United States come with basic warranties that cover repairs for at least three years or 36,000 miles, whichever comes first.

And nearly all new cars come with powertrain warranties that cover the engine and transmission for five years or 60,000 miles.

So, do people purchase extended car warranties?

It depends.

There are several factors to consider when deciding whether or not to buy an extended warranty, such as the length of the manufacturer’s warranty, your driving habits, and the type of vehicle you own.

If the manufacturer’s warranty still covers you, it may not make sense to purchase an extended warranty.

But if your warranty is about to expire, or if you tend to drive more than the average driver, an extended warranty could give you peace of mind on the road.

Ultimately, the decision to purchase an extended warranty is a personal one.

If you’re unsure whether to buy an extended warranty, talk to your car dealer or manufacturer for more information.

The Number of Extended Warranties

In the United States, the extended warranty market is estimated to be worth $2.4 billion, according to a report from IBISWorld.

And the demand for extended warranties is growing.

The research firm predicts that the extended warranty industry will grow by about 3 percent annually through 2022.

There are many reasons why people may choose to purchase an extended warranty, such as the rising cost of repairs and the increasing complexity of vehicles.

But not everyone is sold on the idea of buying an extended warranty.

In a recent survey from Edmunds, 26 percent of respondents said they would never buy an extended warranty, while another 24 percent said they would only consider it if it was offered at a steep discount.

Still, many people are willing to pay for extended warranties, and the market is expected to continue to grow in the coming years.

What Is a Warranty

A warranty is a type of guarantee a manufacturer or seller makes about their product.

Warranties can cover repairs or replacements and are often included with products like cars, appliances, and electronics.

There are two main types of warranties:

Manufacturer’s warranties and extended warranties.

Manufacturers’ warranties are offered by the company that makes the product and are typically included with the purchase.

Extended warranties are offered by third-party companies and can be purchased for an additional fee.

The two types of car warranties are split into powertrain and bumper-to-bumper coverage.

Powertrain warranties cover the engine, transmission, and drivetrain, while bumper-to-bumper warranties cover almost everything else.

Many carmakers offer three-year/36,000-mile bumper-to-bumper coverage.

But once that initial warranty expires, you’ll have to pay for repairs out of pocket unless you have an extended warranty.

Extended car warranties cover repairs after your manufacturer’s warranty expires.

They can be purchased from the carmaker, a dealership, or a third-party provider.

What Does a Car Warranty Cover?

Most car warranties cover repair or replacement costs for parts that malfunction due to manufacturer defects.

However, not all car repairs are covered by a warranty.

For example, damage from an accident or wear and tear from regular use is not typically covered.

It’s important to read the fine print of your warranty to understand what is and isn’t covered.

Warranties can vary in length, but most last for at least a year.

Some manufacturers offer longer warranties, while others provide the option to purchase an extended warranty.

Should You Purchase an Extended Car Warranty?

As your car’s manufacturer’s warranty nears its end, you may wonder if you should purchase an extended warranty.

An extended warranty is a type of service contract that covers repairs and maintenance after the manufacturer’s warranty expires.

If you’re considering an extended warranty, there are a few things to remember.

First, take a look at the length of the manufacturer’s warranty.

You may not need an extended warranty if it’s still in effect.

On the other hand, if the manufacturer’s warranty is about to expire, an extended warranty could give you peace of mind.

Another thing to consider is your driving habits.

If you tend to drive more than the average driver, you may rack up more miles and put more wear and tear on your car, making an extended warranty a good investment.

Finally, think about the type of vehicle you own.

Some cars are more reliable than others, so you may not need an extended warranty if you own a vehicle that’s known for its longevity.

Ultimately, the decision to purchase an extended warranty is a personal one.

If you’re unsure whether to buy an extended warranty, talk to your car dealer or manufacturer for more information.

Fringe Benefits of Third-Party Warranties

In addition to covering repairs, extended warranties often come with some other benefits.

For example, many plans include roadside assistance, which can be a lifesaver if you get stranded with a flat tire or run out of gas.

Some plans also offer rental car reimbursement, which can cover the cost of a rental car while your car is in the shop.

When shopping for an extended warranty, compare the coverage and benefits of each plan.

The Cost of Extended Warranties

The cost of an extended warranty varies depending on several factors, including the length of the warranty and the type of vehicle you own.

In general, extended warranties are more expensive for newer cars and diminish in value as a car gets older.

For example, a five-year warranty for a new car may cost several thousand dollars, while a three-year warranty for an older car may only cost a few hundred dollars.

The Bottom Line

An extended car warranty can give you peace of mind by covering repair costs after your manufacturer’s warranty expires.

However, extended warranties are not for everyone.

Before you purchase an extended warranty, consider the length of your manufacturer’s warranty, your driving habits, and the type of vehicle you own.

You should also compare the coverage and benefits of different extended warranty plans to get the best value for your money.

Different plans offer different coverage, so be sure to compare the coverage and benefits of each plan before you purchase an extended warranty.

The cost of an extended warranty also varies depending on some factors, including the length of the warranty and the type of vehicle you own.

In general, extended warranties are more expensive for newer cars and diminish in value as a car gets older.

Before you purchase an extended warranty, be sure to compare the coverage and benefits of different plans to get the best value for your money.

An extended car warranty can give you peace of mind by covering repair costs after your manufacturer’s warranty expires.

Be sure to get a quote for yourself using our tool above.

Thanks for reading!