Many consumers are leery when it comes to purchasing a vehicle service agreement, also known as an extended service agreement or auto repair warranty. An auto repair warranty is similar to an insurance policy in that it’s designed to protect vehicle owners from auto repair costs once the initial new-vehicle warranty has expired.
According to a recent study, nearly 77% of vehicles on the road are in need of some form of maintenance or repair. Additionally, research has also indicated that 19% of vehicles have dirty air filters. Though this may seem negligible, a dirty or clogged air filter affects your vehicles performance, and may lead to more serious issues and repairs down the road.
With engine and transmission repair costs being some of the most expensive, it’s easy to see why many vehicle owners are choosing to purchase an auto repair warranty to cover unexpected auto repair costs.
What are the benefits?
Think of an extended warranty as protection against the cost of unexpected, but much needed auto repair services. These warranties offer peace of mind, in that they ensure repair costs are covered without causing financial strain. Also, the majority of extended warranties can be transferred to future owners of the vehicle, which in turn may increase the value of the vehicle. Also, it’s common for extended warranties to offer additional auto-related services such as lost key/lockout services, towing, roadside assistance and care rental discounts.
What don’t they cover?
Extended repair warranties are not nearly as comprehensive as warranties that that come with the purchase of a new vehicle, however, they do cover most major vehicle components. Typically, extended warranties have exclusions for items such as light bulbs, headlights, and windshields. Wear items, or parts that deteriorate over time due to normal use, are nearly always excluded, and may include shocks, brakes, and tires.
So does my vehicle really need an extended warranty?
Auto repair warranties are ideal for someone on a fixed budget, such as a recent graduate or retiree, who may not be able to afford costly repairs. Depending on the nature of the repair, auto repair prices can easily go into the thousands. A warranty may also be beneficial if you intended to keep your vehicle for longer than the length of the original manufacturer’s warranty that came with the purchase of the vehicle. It’s important to research the reliability and repair costs of the vehicle you intend to purchase, as well as shop around for the best warranty for your needs.
While shopping for auto repair warranties, you may find variations in cost and what is covered. It’s best to choose one that is line with your budget, and one that allows it to be transferred to any potential future vehicle owners. Peace of mind is priceless, and there’s always room for priceless in anyone’s budget.