Extended Auto Warranty: 7 Vital Benefits

• Posted on Autos.com Editor
• in Car Buying
• on October 7, 2013

An extended auto warranty is an additional protection-as well as an additional expense-offered to consumers by both auto manufacturers as well as after-market companies. If you are like many consumers, you may question the necessity of this expense as new cars and even many pre-owned cars come with some sort of warranty. Keep in mind, however, that an extended warranty is designed to cover automotive components after the manufacturer’s warranty period has expired, protecting owners from expensive, unexpected repair costs.

Original Manufacturer Warranties

Most manufacturer warranties cover a vehicle for a certain number of months or miles driven. For example: GM offers a 36-month or 36,000 mile bumper-to-bumper warranty and a 5-year or 100,000-mile power train warranty on most 2007 or newer vehicles. But with the average person driving more than 36,000 miles in three years the bumper-to-bumper warranty period is up faster than 36 months. And after 5 years or 100,000 miles the power train warranty expires leaving the consumer with the potential for costly future repairs.

The 7 Main Benefits of an Extended Auto Warranty

1. The average person drives more than 15,000 per year.
2. Modern cars are designed to last longer than 100,000 miles, thus an extended warranty offers future financial protection.
3. Automobiles are increasingly more expensive to repair with expenses running into thousands of dollars for drive train and electronic components.
4. Extended warranties will decrease your future financial risk and may increase your vehicle’s resale value.
5. Major repairs generally occur several years into ownership and after the manufacturers warranty has expired.
6. The cost of the extended warranty can pay for itself after even one major repair.
7. Extended warranties can reduce the cost of vehicle ownership.

Unexpected Repair Costs

Engine and transmission repairs can often run into thousands of dollars. The average engine replacement cost is $2,200 while the average transmission replacement cost is $1,900. While manufacturers strive to make their vehicles more reliable, the potential for an unexpected and costly repair always exists. The computer systems used in modern cars can costs over $1,000 to repair. And with over 100 parts, repairing the HVAC system can cost upwards of $700. With these average figures in mind it is easy to see why an extended auto warranty can easily pay for itself after just one major repair.

Buy Today for Fewer Worries Tomorrow

Extended auto warranties are available to cover maintenance costs, the power train components or bumper-to-bumper, with some even offering roadside assistance. They vary in cost according to the plan chosen. Most extended auto warranties have a deductible and while the initial cost of an extended vehicle warranty may seem high they often times will pay for themselves after just one major repair. Extended auto warranties are especially beneficial for those who buy and keep their cars for long periods of time, a trend that is increasing.

Auto manufacturers offer some of the best extended warranties available and often the cost can be negotiated at the time of purchase. An automobile is one of the biggest investments you’ll ever make so for peace of mind in the future an extended auto warranty may be well worth the cost.