Extended warranties on most products have become somewhat of a joke. Most people advise that you should never purchase an extended warranty as they are a blatant cash grab and not worth the paper they’re printed on. However, this axiom has not stopped automotive manufacturers and dealerships from pushing extended warranties on the vehicles they sell—particularly for used vehicles where the original factory warranty has expired. And with original warranty coverage declining from the old standard of five years or 100,000 kilometers to three years or 60,000 kilometers, many people are wondering if they should invest in an extended warranty. But before you make any decisions concerning an extended warranty, consider the following 10 pieces of information.
10. Studies Show Most People Never Use the Extended Warranty
According to Consumer Reports, the majority of people (55%) who purchase an extended warranty never used it for repairs on their vehicle during the lifetime of the policy. Yet, the average cost of an extended warranty on a used car in the U.S. is $1,200. That’s a lot of money for something people never needed to use. The reality is that extended warranties tend to cover the most reliable parts of a vehicle such as the engine and powertrain. Extended warranties typically don’t cover headlight bulbs, brake pads and other parts of a car that wear out and need to be replaced frequently. If you’re going to purchase an extended warranty on a vehicle, make sure you know everything it covers or you’ll be surprised when you’re told you have to pay to replace the spark plugs.