When you’re in the market for a new SUV, it’s easy to focus on the sticker price to determine if it fits within your budget. But when you finalize your purchase, dealers might start tacking on a variety of fees, including extended vehicle warranties.
Are extended warranties worth the expense, or are they just another way for the dealer to make money? Here’s what you’ll want to know about these types of warranties.
What Are Extended Vehicle Warranties?
When you buy your new SUV, it’ll likely come with a factory warranty. An extended vehicle warranty continues the coverage and pays for certain repairs after your factory warranty expires.
You’ll typically make either an upfront or monthly payment for additional coverage. It’s an optional plan you can buy to help you pay for certain repairs your vehicle may need after the original warranty is over. It is important to note that you don’t have to buy an extended vehicle warranty at the time of purchase; they can be purchased before the manufacturer warranty expires. Keep in mind that the price may change over time.
The Best Time to Shop For an Extended Vehicle Warranty
When you’re shopping for a new SUV, you pay attention to make, model, color, and price. You probably peruse websites, checking out the latest technologies and deciding what you want in your new car. You can even imagine yourself driving down the street. Those are the fun things to shop for, but sometimes car shoppers fall short in the details.
When you’re sitting at the dealership finalizing your purchase, they might make a variety of offers at breakneck speed — including one for an extended vehicle warranty. If you haven’t thought about it, how can you make an informed decision? Adding an extended warranty without doing research beforehand can change your payment structure and completely shift your established budget.
Knowing your options ahead of time gives you flexibility, so it’s important to do your research. You can call several dealers ahead of time and ask about extended warranty options, or you might research online to determine if one is right for you.
If you decide to take advantage of an extended warranty, it may make sense to do so when purchasing your SUV because you can add it to the financing. This way, it’s rolled into your monthly car payment, and you won’t need to consider the costs again.
Dig Into the Details
The concept of an extended vehicle warranty sounds good, but be sure to ask plenty of questions so you understand exactly what the warranty covers — and what it doesn’t. Extended SUV warranties are often sold in tiers, each with its own set of rules and types of coverage. If you want to know what’s covered, take the time and read the fine print. Be sure you understand the following:
- Will you have a deductible?
- Are all repairs fully covered?
- Will you pay out of pocket and be reimbursed later?
- Do you have to use pre-approved mechanics?
If you don’t find out while signing up for the extended warranty, you may learn you’re not covered later when you need work done.
What’s Your History?
While car repair isn’t predictable, you can consider your history before deciding to purchase an extended warranty policy. New cars today are more reliable than ever, and that’s why factory warranties are also longer than ever. Finding four, six, or even eight years of coverage between basic and powertrain warranties is not unusual.
Think about how long you typically keep your cars. Some people love the new car experience and trade their old ones in every few years. If you do so before the warranty runs out, the extended warranty might not be beneficial. If you intend to keep your car for years to come, it might make sense to more seriously consider an extended warranty.
You can also use your driving history as a guide. Do you need a road-hazard tire warranty if you rarely drive far from home? Compare that to a driver who loves taking road trips; it might be worth the investment.
Next Steps
Signing up for an extended vehicle warranty as you purchase your next SUV can add thousands to the bottom line. Even if it only adds a few dollars to your monthly payment, it can still be significant throughout your loan payment. Before you rush into a decision, ask yourself if it makes sense to take on the payment for a warranty. Today’s SUVs are more expensive than ever before, too. In some cases, having extra protection against costly repair work makes sense.
Only you can decide whether it’s worth the price tag for additional peace of mind. In making that decision, do plenty of research and find a reputable company offering a policy that makes sense for your needs.