What Is Extended Warranty & Should I Get It?

What is an extended warranty?

Extended warranty is an insurance policy on your vehicle, much like health insurance; it’s a safety net for unforeseen repairs. It’s both an added cost and an added benefit since it doesn’t come with the vehicle you’re purchasing. There are two components in an extended warranty, comprehensive and powertrain:

Comprehensive, often mistakenly referred to as bumper to bumper, covers everything except wear and tear items, while powertrain covers all lubricated moving components inside the motor, drivetrain and transmission. For Subaru, the year/mile limitations are up to ten years, up to 150,000 miles. Hyundai is also up to ten years, and also 150,000 miles. For used vehicles both may go up to 150,000 miles.

Should I get an extended warranty?

First I’ll tell you why you wouldn’t get it: if you’re self-insured and paying out of pocket, or if you’re planning to trade the vehicle within three years.

If that isn’t the case, here’s why you would:

1. It covers all unforeseen repairs except typical wear and tear items, so if anything goes wrong with your vehicle during the allotted time and mile constraint, we’ll fix it.
2. The deductible can be anywhere from $0-$100, which is roughly the cost of just an hour's labor - and realistically the cost to repair a vehicle without a warranty isn’t going down.
3. It has a one-time fee that you can include in your loan.
4. It's transferable to the next owner, which adds value to the vehicle if you sell it.

But most importantly, how much does it cost? This really depends on which years/mileage deal you choose, but it can range anywhere from $475-$2,495, and as I said this is a one-time fee for the full warranty – no catches and no exceptions! The main thing is, we don’t benefit from this service – you do. So please feel free to ask us any questions you like, whether you’re buying a car this week or are just curious for the future.

Stay tuned for more posts on financing your vehicle. We'll be posting more blogs over the next couple of weeks that will feature Auto Armor, Tire & Wheel, GAP Protection, Anti-theft Coding and Prepaid Maintenance. And be sure to check out our Finance Center on our website!