Sitting stranded on the side of the road with smoke billowing out from under the hood of your car, and a $1,000 repair you didn’t expect, can happen to anyone, and when it does, the stress is overwhelming. When you buy your next used car, you’re determined not to be stuck in that situation again, so you consider an extended or aftermarket warranty.
Make sure you do your homework first and understand what you’re purchasing beforeyou sign on the dotted line, or you could find yourself in another stressful situation.
What is an Aftermarket Warranty?
The terms extended warranty and aftermarket warranty are often used to mean the same thing. The manufacturer sells an extended warranty, while an aftermarket warranty comes from a third-party vendor. Both function as insurance for used vehicles that no longer qualify for the original manufacturer warranty to cover specific repairs.
How to Buy an Aftermarket Warranty
The easiest way to buy a reliable aftermarket warranty is to choose a certified pre-owned vehicle from a dealership. You’ll receive a certain amount of time or mileage for specific types of repairs, and you’ll know you’re getting a good, reliable vehicle at the time of purchase.
You can purchase third-party warranties from used car dealerships, the Internet, or offers that come in the mail. Before you buy, ask questions to find out exactly what it covers, how claims are made and approved, and if you’ll have to pay up front and wait for reimbursement or not.
Making the Decision to Buy an Aftermarket Warranty
The big question to ask yourself before purchasing an extended warranty is whether it’s worth the cost. Parts covered under these warranties don’t usually break during the warranty period. If you don’t keep your vehicles for a long time or you buy a reliable brand, you may never use it.
Some people want the peace of mind that comes with warranties. Others have their hearts set on unreliable brands that are known to break down often. Both are good reasons to buy an aftermarket warranty. Do your homework first to make sure you buy a good one.
Beware of Scams
Many warranty scams come through the mail, appearing as if the warranty offer comes directly from the dealership. You won’t see the contract until you’ve paid your money and signed up. Only then will you find out what’s been excluded, or you’ll find out the first time you try to use it and your issue is excluded. Try to get your money back and you’ll either be denied a refund or only be given a prorated amount based on when you signed the contract. When in doubt, call the dealership and find out if they’re behind the warranty offer.
Not all aftermarket warranty companies are the same. Do your research, ask plenty of questions, and before you sign up, ask yourself if you really need the warranty. You may find you’re better off setting that money aside to pay for future repairs yourself.