Extended Warranties for Your Car: Worth Buying?

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Your phone rings. You answer only to hear a computerized robot voice telling you that your auto warranty is about to expire and you need to  extend your coverage. 

I think it’s safe to say that anytime a computer calls, the offer can be written off as a scam. Still, there are people who fall for it.

Good thing U.S. Sen. Charles Schumer, D-N.Y., was smart enough to know it was a scam when he got the call. Now, he’s calling for a federal investigation into what he calls “robo-dialer harassment.”

I hope the feds can help put an end to the extended-warranty scam calls, because I believe they’re giving a bad rep to honest offers that car buyers might encounter at dealerships. Yes, you read that right, I used the words “honest” and “dealerships” in the same sentence, something I haven’t been known to do much

The truth is, extended warranties have their place in the automotive world, whether you’re buying new or used. When buying a car from a dealer, the extended warranty is one of those often-dismissed items that the financial manager presents at the time of document signing. Granted, they can be expensive, but so can unexpected repair bills.

Believe it or not, I have advice on this whole topic:

  • If someone (or something) calls you offering an extended warranty, hang up.
  • If you buy a new car, there’s usually no need to buy the extended warranty. Unless you buy a Land Rover.
  • If you buy a used car, I highly recommend dishing out the dough for the extended warranty; just make sure you know exactly what you’re getting, and ask about deductibles and pro-rated coverage.
  • Before you buy a warranty from the dealership, check with your credit union. I recently saved $1,000 and got better coverage through mine than I would have gotten at the dealer.

In the end, extended warranties are as much about peace of mind as they are about potentially saving you money.

Just don’t ever buy from a robot.

What do you think about extended car warranties: Are they scams or necessities?

-tgriffith

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