Are Extended Car Warranties Worth It?

The short answer is yes. An extended car warranty is coverage you can count on in the event of a mechanical breakdown. Car repairs can be very expensive and with the recent supply chain issues, costs of repairs are higher than they have been for a very long time. In this article, we are going to take a look at what extended auto protection covers and what options are available to drivers.

What does an Extended Car Warranty Cover?

There are typically two variations, a powertrain plan or a comprehensive plan often referred to as bumper-to-bumper plan colloquially. Powertrain warranties will cover parts such as the transmission, engine, and drive axles. Ensuring that the parts that provide power to the vehicle are covered in case of an unforeseen mechanical breakdown. Bumper-to-bumper warranties cover the same parts plus parts such as navigation systems, steering systems, onboard computers, and suspension. Though, as mentioned, this can vary between supplier and plan.

Vehicle service contracts offer similar coverage. However, you have the option of a middle tier plan called a powertrain plus plan and the terms may vary according to the predicted yearly mileage driven. This makes it much easier to select a plan that fits your driving needs and budgetary requirements.

What are the Benefits of Extended Auto Coverage?

Well, there are a few reasons that extended auto coverage is a good idea. The benefits include having coverage for repairs when you need it most and the perks that come with many plans. Let's get into each benefit down below:

Simplified budgeting

The cost of repairs can sometimes be quite high, especially things like transmission or engine repairs. Having extended auto protection in place can make it much easier to accommodate a mechanical failure in your budget. In comparison, paying for car repairs out of pocket means having a few hundred or even thousands of dollars set aside for the potential of a breakdown. While extended auto protection in the form of an extended car warranty or a vehicle service contract means that you can go about your budget confidently. Having one set amount that is affordable for your car in the event of a mechanical breakdown simplifies budgeting.

Increase the Resale Value

You never truly know what the future might bring. Perhaps one day you will want or need to sell your car. Extended auto protection could give you that little extra by increasing the resale value of your car. Used cars that are sold under warranty go for higher value compared to the same vehicles without coverage. Even if you do not have plans to sell your vehicle, it is nonetheless a good idea to maintain its value and to keep the value above other cars in the same range. It will give you an opportunity to get back more and it will make the vehicle more interesting to prospective buyers.

Plan Perks

Depending on the plan and the provider, there are a number of perks that come with the coverage plans. they typically offer variations in roadside assistance. This can include things like towing services, flat tire services, trip interruption, and car rental assistance. If you had to experience a mechanical breakdown without coverage, most of these services would have to be paid out of pocket over and above the car repairs. So, it is something worth considering.

Peace of Mind

Knowing that you are covered in the event of a mechanical breakdown can make your life a little easier. Driving to work or taking a road trip is less stressful when you are covered because you will not have to constantly worry about whether or not you will be able to deal with a breakdown. This factor could be particularly important for people who rely on the vehicles for frequent commuting.

Will an Extended Warranty Work for Me?

It really comes down to whether or not you are able to have funds regularly available for unforeseen mechanical car repairs. Repair bills can range between $300 and $2,500 depending on the repairs needed and damage done. For an entire engine overhaul you can reach bills of over $4,000.

Living on a paycheck-to-paycheck basis makes it more difficult to keep money aside for large bills. Particularly bills that tend to happen sporadically. An extended car warranty or vehicle service contract can help to alleviate that stress. If you do not have the possibility to keep upwards of $1000 set aside for unforeseen auto repairs, then yes, an extended auto protection is worth it.

If you are unsure about whether or not this is the right move for you, take a look at what Chaiz has to offer through our fantastic search tool. You will be able to look for plans and compare coverage options all online. No phone calls whatsoever. Just a marketplace to compare plans and decide fi this is the right move for you.

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