The Basics of Warranty Prices
An extended car warranty is an insurance policy on your vehicle and protects against expensive, unforeseen repairs.
Many feel that purchasing an extended warranty is unnecessary because they believe their car will not have any problems.
Others feel that the extra protection is worth the price.
So, what is a fair price for an extended warranty?
There are a few things to consider when determining if the price of an extended warranty is fair.
The first is the type of coverage you are looking for.
There are four main types of coverage: powertrain, bumper-to-bumper, and stated component.
Powertrain coverage is the most basic and only covers the engine, transmission, and drivetrain.
Bumper-to-bumper coverage is the most comprehensive and covers almost everything on the car except for a few stated components.
Stated component coverage is in between powertrain and bumper-to-bumper and covers specific parts that are listed in the contract.
The second thing to consider is the length of the warranty.
Most extended warranties are either for 4 years/48,000 miles or 5 years/60,000 miles.
Some companies offer 6 year/75,000 mile policies.
The third thing to consider is the deductible.
The deductible is the amount of money you have to pay out-of-pocket before the warranty company starts paying for repairs.
Most deductibles are $100 or $200, but some companies offer $0 deductibles.
Now that you know the basics let’s look at some specific prices.
What Are My Warranty Options?
They offer three different plans: Select, Preferred, and Supreme.
The Select plan is their most basic plan, and it covers powertrain components.
The price for this plan depends on the make and model of your car, but the average cost is around $350 per year.
The Preferred plan is their mid-level plan, and it covers bumper-to-bumper components.
The price for this plan also depends on the make and model of your car, but the average cost is around $700 per year.
The Supreme Plan is their most comprehensive plan, and it covers everything on the car except for a few stated components.
The price for this plan depends on the make and model of your car, but the average cost is around $950 per year.
What Is the Cost of Repairing My Car?
The cost of repairing your car will depend on your vehicle’s make and model, the problem’s severity, and where you take it to be repaired.
For example, if you have a problem with your transmission, the cost to repair it will be more than if you have a problem with your air conditioner.
Additionally, the cost of repairs will vary depending on whether you take your car to the dealer or an independent repair shop.
The age of the vehicle can sort the cost of repairs on a car.
On average, a one-year-old car will cost $600 to repair, a three-year-old car will cost $1,200 to repair, and a five-year-old car will cost $2,000 to repair.
These numbers are just averages, and the actual cost of repairs on your car could be higher or lower depending on the abovementioned factors.
Generally speaking, repairs at the dealer will be more expensive than repairs at an independent shop.
However, you may have to pay more for labor at an independent shop.
To get a general idea of repair costs, you can check out this website: www.repairpal.com/estimator.
Do Warranties Cost Less than Repairs?
The cost of an extended warranty is usually less than the cost of repairs.
For example, let’s say you have a problem with your transmission, and it will cost $3,000 to repair.
If you have a warranty that has a $100 deductible, then you would only have to pay $100 out-of-pocket, and the warranty company would pay the rest.
In this scenario, the warranty would save you $2,900.
However, some repairs may not be covered by your warranty.
For example, if you have wear and tear on your brakes, most warranties will not cover this because it is considered to be normal wear and tear.
Additionally, some warranties limit the amount they will pay for repairs.
Be sure you know that amount before agreeing to an extended auto warranty.
For example, if your transmission needs to be replaced entirely, your warranty may only cover $2,000 of the cost, and you would have to pay the remaining $1,000 out-of-pocket.
In this scenario, you would not save nearly as much money by having a warranty.
It’s essential to do your research and understand what is and is not covered by an extended warranty before purchasing one.
What Is the Best Time to Buy an Extended Warranty?
You can purchase an extended warranty at any time, but the best time to buy is typically when your original manufacturer’s warranty is about to expire.
This is because most problems with a car occur within the first few years of ownership.
By buying an extended warranty when your original warranty is about to expire, you can extend the coverage on your car and have peace of mind knowing that you are covered in case something goes wrong.
What Are Some Other Things to Consider When Buying an Extended Warranty?
In addition to the cost of the warranty and what is covered, there are a few other things you should consider before buying an extended warranty.
First, you must decide how long you want the coverage to last.
Most extended warranties last for 3 or 5 years, but some can last up to 7 years.
It would be best if you also decided what deductible you are comfortable with.
Deductibles can range from $0 to $100 or more.
The higher the deductible, the lower the cost of the warranty will be.
Finally, you must research the company you are considering buying a warranty from.
Make sure they have a good reputation and that they are financially stable.
You can check the Better Business Bureau’s website to see if any complaints have been filed against the company.
Get a Warranty and Save
Purchasing an extended warranty is a big decision and one that should not be taken lightly.
Be sure to do your research and understand all of the terms and conditions before you buy.
An extended warranty can save you a lot of money if your car needs repairs, but only if you understand what you are buying.
If you have any questions, ask a qualified automotive technician before making your purchase.
ProtectMyCar.com is an excellent resource for extended car warranties.