Whether you own a new car or a used one, someone has most likely tried to sell you an extended car warranty for it, at least once. These extended car warranties are more correctly put vehicle service contracts (VSC) you buy for your vehicle, in order to extend your bumper to bumper warranty.
Bumper to bumper warranty vs extended warranties
The bumper to bumper warranty is the warranty you get from your dealer/car maker when you buy a vehicle. This warranty covers your car from 3 years (36,000 miles) up to 6, 7 years (72,000 miles and even more in some cases), depending on the car maker.
The bumper to bumper warranty covers pretty much every part of your car, from bumper to bumper.
Extended car warranties basically extend the warranty of your car for a few more years, depending on the company that offers them. This type of warranties varies in terms of coverage, from provider to provider and depending on the price you are willing to pay for them. There are some policies that offer a basic coverage of only the essential parts of the car. Others on the other hand get really close to the bumper to bumper warranty in terms of coverage, being more comprehensive.
Extended car warranties usually include 24/7 roadside assistance, rental car reimbursement, the freedom to take your vehicle into any repair shop in the country, as long as it is authorized. A lot of extended car warranty providers also allow you to transfer your warranty. That means that if you sell your car while your vehicle service contract is still valid, you can transfer it to the new owner.
The benefits of extended car warranties
The number one benefit of an extended car warranty contract is peace of mind. Car breakdowns don’t occur when you want to and when you are prepared to take care of them. They usually come spontaneously and they cost a lot of money. A VSC is a great solution, because you have to pay for it in small installments, as supposed to coming up with thousands of dollars all at once, for a costly repair.
These warranties are very useful for people who own used cars, too, because they usually need more repairs than new vehicles.
What do you have to know about extended car warranties?
Extended car warranties can be bought from a third-party or directly from your dealer. If you opt for the latter, you should be prepared to negotiate your price, because they tend to be more expensive.
When you want to purchase an extended car warranty, you have to know that there will be some requirements, in terms of age and mileage of your car. The duration of the contract varies from provider to provider, some will extend your manufacturer’s warranty with 2, 3 years, others may go as high as 6, 7 years.
You should also be aware of the fact that a lot of companies charge you a deductible (usually $150, $200). That means in case your car breaks down (even if the problem of the car is covered by your policy), you still have to pay that deductible and your extended car warranty will cover the rest of the expenses.
Make sure you do some research and find out what kind of features are included. Roadside assistance and rental car reimbursement are basic ones and should be offered by any service. It may also be useful to choose a company that lets you transfer your warranty.
USAA Extended Car Warranty – Is it a good option to consider?
USAA is a very attractive option but only if you are/were in the military, because this company serves only military members and their families. USAA stands for United Services Automobile Association. The company offers various financial services, from insurances to loans and investments.
As far as extended car warranties go, this company is really generous: it doesn’t charge a down payment, it doesn’t charge a deductible and covers used cars as well, if they are up to 10 years old and have up to 115,000 miles on them.
Another great thing about USAA is that it offers unlimited rental reimbursement. That means they will pay for you to rent a car while your car is in the repair shop, for as long as it is there. Most companies only offer rental reimbursement for up to 5 days.
USAA allows you to pay into 18 monthly installments and you can also transfer your warranty.
Roadside assistance is also included and they also have a feature called Deployment Deferment, that allows you to put your warranty on hold until you get back home.