This is a common question that the F&I manager will ask, and it’s worth your consideration. Do you get tired of a car by its third year? If so, paying for an extended warranty doesn’t make much sense, since the manufacturer warranty will still likely be in effect. But if you are someone who drives a car until the wheels fall off, the extended warranty might be worth considering. Nevertheless, go through the rest of the questions here before making a decision primarily based on length of ownership.
- Who stands behind the warranty?
Many dealerships offer third-party warranties from companies with varying track records. If you are going to purchase an extended warranty, make sure it is backed by the automaker, not just the dealership or some other company. You can use a manufacturer-backed extended warranty at any dealership across the country. A third-party warranty might be good only at the dealership that sold it to you.
If you are considering coverage for a specific purpose, such as a road-hazard policy that isn’t offered by the automaker, check for online reviews to see what others are saying about it.
- Have you shopped for the best price?
It’s unlikely that an F&I manager will let you shop around while you’re sitting at his desk with a pile of purchase paperwork between the two of you. This research is best done prior to your dealer visit on the day that you finalize your purchase. If the car purchase is already a financial handful, you can also shop for a better price after the sale.
The F&I manager at the dealership that has your car might say that the price of the extended warranty is not negotiable, but that might not actually be the case. If you check with other dealers, you’ll find that some of them will have a lower asking price for the same product. Or they might be more willing to negotiate.
- Do you know what’s covered?
An extended warranty isn’t the cure-all that some dealers make it out to be. Many wear-and-tear parts — items that will eventually break or wear out — are not covered by most vehicle extended warranties.
To complicate things even further, many extended warranties come in coverage tiers (silver, gold, platinum, for example), each with its own price and level of coverage. Take the time to read the fine print to determine what is and isn’t covered.
You must also determine who will front the cost for the repair bill. Are the repairs fully covered? Do you have to pay a small deductible? Or do you have to pay for the repairs up front and get reimbursed later?
- Will you have peace of mind if you don’t buy it?
The answer here is all up to you. If you’re someone who will always have a nagging feeling that you should have bought the warranty, go ahead and get it. Sometimes there’s no price tag you can put on peace of mind.
On the other hand, if you are confident that you’ve purchased a reliable vehicle, you can walk away from the F&I office and not give the extended warranty a second thought.
- Have you looked at your repair history?
Consider your own history with vehicle breakdowns. Have your other cars had the kinds of problems that would have been covered by a warranty? If you are considering a road-hazard tire warranty, for example, think about how many times you’ve had a flat tire. If there is a lot of debris on the roads in your area or if you’ve had several flat tires in a short span of time, a road-hazard warranty may be worth looking into. But if you can’t remember the last time you had a flat, you may not need the coverage.
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