Top Things to Know About Extended Warranties for Autos

When you purchase a vehicle, you are usually offered the option of purchasing an extended warranty.  These warranties may cover major repairs like the transmission or a blown engine.  It can also cover minor repairs such as a broken switch, key fobs and door handles.  Before you purchase an extended warranty, make sure you know what is covered.

• Warranties are usually purchased at the same time the car is purchased.


• The cost of an extended warranty is usually 10 to 20 percent of the cost of the vehicle.


• Warranties are usually limited to a specific time or mileage.  For instance, your warranty may cover anything that goes wrong in the first three years or 36,000 miles, whichever comes first.


• Check the Better Business Bureau before purchasing an extended warranty.  Many companies try to sell cheap warranties that are not even worth the paper they are written on.


• Warranties sold by dealers may require that you have the repair completed at their location.  This may limit you use of the warranty, depending on your location.


• You can finance your warranty with your vehicle at the time of purchase.  Adding it to the overall price may slightly increase your monthly payments, but it will be worth the extra cost if there is a problem with your vehicle.


• Some warranties cover roadside assistance 24 hours a day, seven days a week.


• A warranty can be transferred to a new owner if the car is sold.  It depends on the warranty contract.