Extended Warranty Good / Bad

Before I start my comment, I am going to assume the warranties I am talking about are some of the good ones out there.  And believe me there are many that are not good..but that will be for a later blog.

I get numerous inquiries about extended warranties and here is my simple answer. Most warranties can run 24,36, 48 months and in some cases as much as 96 (8 years). Most have levels of coverage, my experience says get it all or nothing…if your going to get the warranty, get the best they have, normally only a few hundred dollars difference.

Auto Warranties not simply good or bad

My question to you, if over the next 36 to 48 months of your working life, while you probably have a car payment, a $1,000 to $1,500 repair would cripple your life, or cause uncomfortable hardship, a warranty might be worth looking at. The cost for a good policy will normally run around $1,250 to 1,500, which relates to about $20 to $25 per month increase in monthly payment.

If your car is a productive part of your life, it might be easier to invest $25.00 per month for peace of mind while you are paying your monthly payment, instead of being stranded or land-locked for an extended period while you are getting your vehicle repaired, or saving money to get it repaired.

  • Your usage
  • Monthly expenses
  • Potential loss impact

I personally have only purchased 1 extended warranty in my entire life, on my wifes Jeep many years ago…and somehow she broke the engine mounts (go figure, wild women driver) the end result was it cost more to fix, then the initial warranty cost,  so in essence we won, but cars today are far more reliable then they were years ago, and going 150,000 to 200,000 miles on anything that is well maintained, is a pretty realistic expectation.    I have however been party to helping numerous folks get warranties, which I thought was a good thing based on their circumstances.    For example, a single mom with no extended family,  a one car families that heavily rely’s on it for all their transportation.

The final deciding factor, might just be a “Peace of Mind” decision…and there are many things in life we make choices about from that mindset…so don’t be afraid of buying a good warranty program if you feel you need one.

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