Extended Auto Warranty Or Auto Insurance? FAQs About Coverage
How does an extended auto warranty differ from auto insurance? You want to protect your investment. But you're not sure whether you need an extended vehicle warranty, an insurance policy, or both. Take a look at what new used car owners need to know about warranties, insurance, and the options.
What Is An Extended Warranty?
New cars come with manufacturer's warranties that cover the cost of repairs or replacement for specific parts. While these warranties can reduce out-of-pocket expenses for car owners, they have a shelf-life. This means a car that is several years old or is a higher mileage vehicle won't come with a warranty.
As the name implies, an extended warranty extends the manufacturer's warranty. This is a service contract that spells out the specific types and amounts of coverage. The extended warranty may cover repairs or parts replacements for the vehicle under specific conditions after the initial warranty expires. An extended warranty may also include coverages that go beyond the manufacturer's warranty. Some car owners choose to add this to an existing warranty.
An extended warranty won't cover routine services, such as an oil change or tire rotation. It may not pay for failures due to wear or improper maintenance. Always review a warranty's inclusions and exclusions before you agree to a contract.
What Is Auto Insurance—and How Does It Differ From A Warranty?
Auto insurance helps to offset the costs of damage to your car after an accident, vandalism, or other similar incident. Even though auto insurance will pay for the costs of repairs (less the deductible) that are necessary after an accident, it won't cover parts that break or damage that happens during routine use. Mechanical issues and equipment failure won't fall under the insurance coverage category—but an extended warranty may pay for some or all of these issues.
Do You Need An Extended Warranty?
Simply stated, no. This is an optional type of coverage that you are not obligated to buy. The decision to purchase a warranty is a personal one. You may want an extended auto warranty if you feel the cost of repairs outweighs the price of the coverage.
Do You Need Auto Insurance?
While an extended warranty is a choice, most states require car wonders to purchase auto insurance. The specific type of insurance and the amount of coverage varies by state. An insurance agent can help you to understand your state's minimum requirements.
Where Can You Buy An Extended Warranty?
You already know that an insurance agent can sell you an auto insurance policy. But where can you purchase an extended warranty for your car? There are a few options. Some car owners buy their warranty from the manufacturer or dealer. If the manufacturer or dealer doesn't offer a warranty or the contract doesn't cover the services you may need, you can buy one of these plans from a private company. Research the options and make sure that the extended warranty makes financial sense for your needs. Contact a business like Safeguard My Car for more information.