Why Extended Warranties Are Simply Not Worth Your Money?
You will often come across dealership hoardings saying something like “used cars in Greenville Laurens Road with assured warranties”. And such advertisements are naturally enticing. One of the major worries of used car shoppers is the repair expenses that customers expect will tag along and having warranties mean that the cost will be the responsibility of someone else but not the owner. Thus, you walk into such dealerships expecting a great deal only to find out that the hoarding was missing the term “extended”. Yet, extended warranty or not, it is a warranty no doubt, and you pay the extra $1,500 to buy a used car with the warranty.
Reality check 1 –there are used car lots in Greenville, SC where the warranty you get is not the typical extended package. And reality check 2 – the amount you pay for an extended warranty is not worth the service you get. Combine these two and the deal is not that great anymore. You must buy from dealerships where the word warranty means exactly that.
The truth about extended warranties
Technically, extended warranty is a term used in CPO dealerships where the deal is generally 2 years or 24,000 miles from the time of your purchase. It comes with the car and you do not have to make any initial payments. In standard used car dealerships, warranties are provided by third-party warranty providers and are typically known as service contracts. This word makes the warranty more like an insurance policy rather than the typical warranty you expect to receive. And this feature does not make the deal worth taking.
Similar to insurance, you need to make a one-time payment to buy the extended warranty, generally $1,500. When the time comes to cover the repair cost, the third-party service provider starts behaving like an insurer where they check into a host of things like your maintenance log, driving habits and more. Plus, you do not generally get full coverage. And your car does not break down that often in just 2 years. So, the $1,500 that you pay does not give any valuable return.
What should you do?
Now, the above is true for almost all third-party warranty providers. And just because the firms will check a few things before covering your repair costs does not mean that you should not get warranties at all. But you need not pay for the same. In Family Auto of White Horse Road, the buy here pay here used cars in Greenville, SC come with comprehensive warranties of 2 years/36,000 miles without any extra payment. The third-party provider has the same business model but you do not lose any monetary value. To summaries, buy from dealerships where the extended warranty is included right in the package. Once you pay for it, the worth of the deal decreases.
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