Why Warranty Is Worth It
Why Warranty Is Worth It
Posted on May 16, 2022
A warranty provides a safeguard against unexpected expenses. It might seem like a sales trick, but it carries value if you don't have the budget for expensive repairs further down the line. You should seriously consider one especially if you purchase used, luxury vehicles; repairs on such vehicles can be very costly over time.
Two types of warranties exist the manufacturer's warranty, which typically comes with the vehicle but can also be purchased, and a third-party or comprehensive warranty that's purchased as an aftermarket product.
Let's dig deeper into the latter and see why it is worth the money!
A third-party warranty is one you can buy to extend your coverage after the automaker's warranty expires.
If you want the peace of mind of full coverage for your vehicle you will need to protect yourself from any unexpected expenses. You should also conduct research and find out exactly what type of protection you will need for your vehicle.
One of the main reasons to buy aftermarket protection is if the manufacturer's warranty has expired. Consider the make, model, year, and mileage on your vehicle then figure out what option is the right fit for you.
Keep in mind that the likelihood of repairs will increase over the life of a vehicle and having a warranty can cover these repairs so you don’t have to pay out of pocket.
Lump-sum vs. Loan Rollover
Another consideration is whether to pay for it upfront or roll the costs into your loan. If you decide to pay upfront, expect to budget somewhere between $1,000 to $5,000. If that's not an affordable option, you can often roll the price into the loan and pay as little as $30.00 a month.
Average Cost of Repairs
Understanding the cost of common repairs can help you decide if an extended warranty is a good idea. The make and model of your vehicle will significantly influence the price of repairs however, the bottom line is that repairs are almost inevitable with any vehicle.
Here’s an example of average repair costs for two models, Economy and Luxury: the Mercedes GLC300 and Toyota Camry:
Water Pump Replacement: $1,345
brake booster replacement: $900
Average Annual Repair Cost: $1,137
Water Pump Replacement: $613
brake booster replacement $877
Average Annual Repair Cost: $552
In a nutshell, no matter how you put it, an extended warranty is a good option to ensure you are protected against inevitable repair costs.