When you buy a new car, it will typically come with a warranty. This is great, as it means that if something goes wrong with your vehicle within a certain timeframe, the company will cover the repairs. But why do some companies offer longer warranties while others don’t? Well, it all comes down to marketing.
An extended warranty is essentially an insurance policy. And, like all insurance policies, there is a cost associated with it. The longer the warranty, the more it will cost. So, why would a company offer an extended warranty? There are a few reasons.
The first is that it can be a good marketing tool. Offering an extended warranty can make a company seem more trustworthy and reliable. It shows that the company is confident in its product and is willing to stand behind it.
The second reason is that it can be a good way to make money. While extended warranties do cost money, they can also be quite profitable for companies. This is because many people never end up using them. Studies have shown that only around 1 in 10 people who buy extended warranties actually end up making a claim.
Should I Buy an Extended Warranty?
There are several factors to consider when making this decision. One thing to keep in mind is that not all cars need extended warranties. The type of car you buy and how well it’s made are two important factors to consider.
If you buy a high-end luxury car, for example, it may come with a longer factory warranty than a lower-priced model. And if you buy a vehicle that’s made well, with quality parts, you may not need an extended warranty.
However, extended warranties can be a good idea for certain types of cars. For example, if you buy a car known for having many problems, or if you plan to keep the car for a long time, an extended warranty may be a good investment.
There are a few things to remember when shopping for an extended warranty. First, ensure you understand exactly what’s covered. Most extended warranties will cover major components like the engine and transmission, but they may not cover things like the paint or upholstery.
Second, extended warranties typically have a deductible, so you’ll need to pay for any repairs below the deductible amount. Finally, shop around and compare prices before buying an extended warranty.
If you do decide to buy an extended warranty, keep in mind that you can often get a better deal if you purchase it when you buy the car. This is because dealerships often offer discounts on extended warranties if you buy them and the car simultaneously.
Properly Protect your Vehicle
At the end of the day, whether or not to buy an extended warranty is a personal decision. However, if you’re worried about expensive repairs down the road, then an extended warranty may give you peace of mind.
Even if you’re on a tight budget, it is a good idea to at least consider extended warranties when buying a new car.