Extended car warranties, which are, in fact, vehicle service contracts, are very popular forms of insurance you can get for your vehicle, be they new or used. These contracts are written agreements offered by your car dealer or by third-parties, that cover your car in case of a mechanical breakdown and pay for the repairs, in case the vehicle needs to go in the shop.
These warranties are a good way to extended your manufacturer’s warranty (bumper to bumper warranty) when you buy a new vehicle. Most people want to keep and use their cars after the original car warranty expires. Research shows that 95% of the customers in the market for a car place durability on top of their priorities.
Unfortunately, a manufacturer’s warranty covers you for only a few years, usually the first 3, 4 or 5, if you are lucky, depending on your car maker. After that, your vehicle is left exposed unless you extend that warranty. Mechanical breakdowns will occur sooner or later, so you need to be prepared for them.
People are sometimes reluctant when it comes to buying VSCs (vehicle service contracts), because they are worried they might not use them and will end up paying them for nothing. That thinking is not necessarily economical. These extended car warranties can usually be paid in small monthly installments that you’re not going to feel that roughly. However, when car issues occur, they are usually much costlier and if you’re caught off guard, you’ll have to come up with all the money at once.
So, it really makes sense to invest in an extended car warranty, especially if you own a used car, because they are more likely to breakdown. New car owners can also buy them, from the dealer or a third-party, although they are usually more expensive when you go through the dealer. VSCs can be purchased anytime before your manufacturer’s warranty expires. Most companies have a waiting period of 30 days anyway, precisely to make sure you didn’t buy the warranty because your vehicle was already broken. That is why you have to wait for approximately a month to be able to use the extended car warranty.
An extended car warranty can cover specific components or systems of your car or your entire car, depending on the type of contract you buy. Some VSCs come really close to the bumper to bumper warranty offered by your car maker. The more complex the coverage, the more expensive the warranty.
The plans vary from provider to provider. Some of them cover you for fewer or more years (or additional miles) and each provider has his requirements. They only accept vehicles with a certain mileage or age, some of them may limit you to only certain repair facilities and in most cases, there is a deductible you have to pay as well. That is why it is important to carefully read the terms before signing up anything.
Most extended car warranties offer features such as:
- 24/7 roadside assistance
- Rental car reimbursement; in case your own car is broken and in the shop for repairs, you can rent a car to get around and the extended car warranty provider will reimburse you for a certain number of days for the rental costs
- Some companies even offer money for a hotel in case your car breaks down while you are traveling
- Most providers let you choose your repair shop and you can take you car into any authorized shop in the country
- You can pay for your vehicle service contract in several installments (12, 18, 24 monthly installments, depending on the provider)
- There is also the option of transferring your extended car warranty in case you want to sell your car while your extended car warranty is still valid
Which are some of the best extended car warranty services to try?
USAA (United Services Automobile Association) is one of the oldest extended car warranty providers in the country. The company was founded in 1922 and offers various financial services to military members and their families.
Their extended car warranty comes in two available plans: manufacturer wrap protection (for cars that still have at least 30 days left from their manufacturer’s warranty) and comprehensive protection (for cars that are up to 10 years old and have up to 115,000 miles on them).
USAA comes with 24/7 roadside assistance, unlimited car reimbursement, the option to pay in 18-month installments. They don’t require a deductible or a down payment.
Autopom! covers both Canada and the entire US and has comprehensive plans. They offer the option to pay in 24-month installments, they offer 24/7 roadside assistance, 5 days rental car reimbursement. They charge a $200 deductible.
AA Auto protection
They have 20 plans to choose from and their priciest plan extends your car warranty with up to 6 years (100,000 miles). You can pay for the extended car warranty over a period of 2 years and you get rental car reimbursement for up to 5 days.