Why should you buy an Extended Car Warranty

It always makes sense to go for an extended warranty insurance only after considering all the pros and cons, simply because the plans may not be helpful for most of them. As the term suggests, an extended warranty increases the warranty of an existing purchase beyond the standard warranty timelines with its pre-existing exclusions. An extended warranty is a need-based product that continuously varies case-to-case.

Extended warranty insurance is of two types – one offered by the manufacturer of a product and the other is provided by a third party. While purchasing an extended warranty from a manufacturer will provide convenience to a consumer, third-party vendors generally offer extended warranties with better features.

But it is essential not to confuse insurance with an extended warranty. The difference can be understood with the help of an example. Let’s take the case of a car radiator being either insured or having an extended warranty. An extended warranty will cover if the car has radiator damage due to driving wear and tear. Insurance would have no part here.  On the contrary, the insurance would provide car warranty coverage if a car radiator is damaged in an accident. An extended warranty would not be of any help in such a circumstance.

However, while extended warranties and insurance are two different things, an extended warranty can also be compared with a driver in a life insurance policy.

Having an extended warranty keeps you safe from the unexpected circumstances that you might encounter while using your vehicle and can end up saving you lots of money and various other hassles.

Extended warranties may be a good investment for consumers who use their vehicle over and above their average use. In such cases, the chances of damage, wear and tear and other warranty-based inclusions are generally higher. The critical benefit of an extended warranty is that it gives you good protection against the failure of a significant & expensive part. e.g. engine or gearbox of a motor).

Indeed, extended warranties are not helpful in every case, so you must exercise caution while choosing one. Here they go

Please enquire about the company: The warranty must be backed by a reputed company or with specific years of existence in the market. If not, you need to be cautious.

1. Check for duplication: The manufacturer gives extended warranties such as in ‘laptops’ and external companies such as in ‘mobiles’. “One should check who is offering the extended warranty and that it’s not getting duplicated, i.e., you may be purchasing it from another company whereas the manufacturer already offers it. Only when an external company is housing damages in addition to the manufacturer, it makes sense to avail,”
2. Check the coverage: Extended warranty should give you enough coverage for your item. However, in many instances, extended warranties cover only slight wear and tear. Still, they do not provide any scope for replacing the costly breakdown or damages which are not in your control. In such cases, these warranties are not helpful. You should also check which parts will get repaired and where a replacement will be done.
3. Evaluate the service: Consumers should assess the services of the company Consumers should consider the company’s benefits. Whether it will be an authorized and qualified technician who will perform the repairs? Is there a pickup facility, or will you have to take the vehicle to the service center? Is there 24-hour telephone support from the company?
4. Hidden cost: Any hidden fees must be checked for, such as in cases of home repair or pickup facility or cost beyond a threshold coverage amount etc.
5. Check for transferability: Companies are being acquired these days, and in such cases, the affected company’s ownership also changes. So, check if the car warranty coveragewill be transferred to the new owners, or will it lapse if the ownership changes?

It is always advised to buy an extended car warranty as it will have a car warranty coverage which will cover some major wear and tear and major breakdowns.