Are extended car warranties an expensive gamble?

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Car shopping is more than just make, model, and color. You also have to consider warranties. 

“There are terms and conditions in these warranties and you have to pay close attention to those,” said Brian C. Caffrey, of Scaringi Law. 

Warranties typically cover the major systems of the car like the engine, transmission, and suspension, but all warranties are not created equal. When buying a new car, most manufacturers provide one. 

“Chances are it has a pretty good warranty from the manufacturer because the manufacturers are competing for customers, and that’s a big selling feature,” said Caffrey. 

What if the dealer is selling an extended warranty on top of the manufacturer’s warranty?

“If it doesn’t give you anything more then the manufacturer’s warranty, save your money, use it for maintenance on your new car,” said Caffrey. 

Caffrey also recommends asking your self this question:

“Think about how long you want to have the car. If you are going to have it for three years and trade up to something else, the manufacturer’s warranty will cover you.”

If you are buying a used car, pay attention to the paper on the window. If the box for dealer warranty is checked, be sure that the service contract box is also checked. If so, the warranty doesn’t come with the car; you have to buy it.

Also, if the used car has high mileage, a warranty may not be worth it. 

“You need to be especially careful about those warranties and see what is covered and what isn’t covered by reading it before you buy, before you sign anything,” said Caffrey. “You might very well be better off taking your used car, that’s why your car is less expensive, and paying for the repairs as you go.”

Warranties can be offered by a manufacturer, a dealership, and sometimes a third party. It is important to know who you are signing that contract with and read the fine print. 

Some warranties have clauses that say certain systems of the car are covered, but only under certain circumstances. Others say if you modify the car in any way, the warranty is no longer valid. 

So, don’t rush, and be sure you know what you’re getting. 

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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