Can you Buy an Extended Warranty on a Used Car?
Can you? Should you? Why would you? It is all a bit confusing. What does an extended warranty cover? We realize there are many questions and that warranties of all kinds can be frustrating to understand. Let’s review the important items, the strong factors and things you need to know before buying an extended warranty for your used car.
For many, an extended warranty can provide peace of mind and comfort knowing that if an unexpected breakdown rears its ugly head, that it will be covered under warranty. Let’s take a look at what that means.
What is an Extended Warranty on a Used Car?
An extended warranty can also be called a service agreement or service contract. An extended warranty may be sold at the dealership when buying a car or post purchase as an aftermarket offering. Extended warranties will cost additional to the vehicle and when purchased at the dealership, often are asked to be paid up front or financed with your vehicle. The extended warranty is additional to the Original Equipment Manufacturers (OEM) Warranty. Each make and model offer different OEM coverage periods. They are put in place to cover defects in materials and workmanship from the factory. OEM will expire eventually so make sure to understand the parameters of the OEM so to not be without coverage.
Like all warranties, whether you are covered by an OEM or an extended warranty, there are terms and conditions that spell out items covered and those excluded. Most extended warranties are offered for a set amount of years and usually applies to parts and labor. Always review the conditions and claim information so when needed it will be easy to file a claim and get your vehicle back on the road.
What is Mechanical Breakdown Insurance (MBI)
MBI is a regulated insurance product. It, like the other plans, covers major failures that can occur during the ownership of your vehicle. MBI policies have a set of terms and conditions that you will want to review like the other plans mentioned above. MBI policies are usually offered by a third-party aftermarket for your new or used vehicle. Important note: Due to the nature of MBI and it only being offered through an insurance company, it is regulated by the insurance industry for standards and claims.
Am I Covered by my Normal Car Insurance?
None of the above plans or policies cover damage caused by a driver or repair damage from an accident. Those repairs are covered by basic car insurance. You will need to keep insurance coverage in case of an accident. Extended warranties also do not cover wear and tear. Those services are covered under your routine maintenance plans.
Having an extended warranty or MBI means you will not have to unexpectedly shell out hundreds or thousands of dollars for repairs that creep up from time to time. Big repair bills can happen at the worst times, and extended warranties and MBI can protect against those.
What Does an Extended Warranty Cover on a Used Car?
Make sure to review the plans, deductibles and items covered when researching options. The plans usually offer different coverage levels and are designed to fit within your personal budget.
In general, below is an example of items covered under extended warranties.
Alternators, Manifolds, Pumps
Heating and Cooling Assembly
Do I need an Extended Warranty?
No matter how well built your make and model is, unexpected repairs are bound to arise. For many, their vehicle is their lifeline and their only mode of transportation. If you buy a used car, truck, or SUV you might have payments to still pay but when the OEM runs out, no warranty. Extended warranties have become more critical as people decide to keep their vehicles longer. The ideal is to pick up an extended warranty once your OEM expires. This will give you constant coverage in case a repair is needed.
As with any plan or policy of this type, you may never use the coverage but certainly when and if you do have an unexpected breakdown, it can save you thousands of dollars per repair. Peace of mind is worth paying for if you can’t afford for your vehicle to be down for the count. If you can afford to cover breakdowns when they arise, it may be easier for you to self-insure by creating a savings account for repairs when needed. But as we all know, some repairs can cost hundreds and some can cost thousands. The goal is to protect yourself, as best as possible, for the unexpected.
How to Get an Extended Warranty on a Used Car?
There are several factors to consider when comparing prices on an extended warranty.
These items and others should be looked into prior to securing a plan.
- Fully review the terms and conditions, you may find that an MBI or extended warranties will cover more parts and systems than even a dealer warranty.
- Most aftermarket plans will cost less than an extended warranty at the dealership.
- Do you choose where the repairs are made, or do you always have to take the vehicle to the dealership?
- Is the plan transferable to a new owner, if and when you sell your vehicle?
- Do they offer different plans to fit into your budget?
- Make sure to review the deductible offers. These are usually $100 – $500.
- Check the mileage restrictions. Some warranty companies can insure and cover higher mileage vehicles.
- Review vehicle age restrictions.
- Is there a waiting period or are you covered when you buy?
In addition to the above pricing is determined by your make and model, the mileage on your vehicle and the year your model was built.
Where to buy an Extended Warranty for a Used Car?
In addition to the dealership where you purchase your used car, there are several companies that offer MBI or extended warranties. Remember, not all warranty companies are the same. Do your research prior to buying. Again, take a look at those terms and conditions so you know the ins and outs of each plan.
olive is shaking up the way drivers look at extended warranties. olive owns and operates olive Insurance Solutions. For nearly 20 years our company and its affiliates have been providing coverage for vehicles in a consumer friendly way. In 2020 we launched gogetolive.com to take our coverage and products to the next level with a fully digital offering built to serve you. We are a consumer
informed product provider, seeking to offer the best product at the right time in a transparent manner.
Why Choose olive?
No waiting period
Start coverage up to 140,000 miles
No yearly mileage limits
Coverage across the US
Manageable monthly payment options
olive puts customers in the driver’s seat by providing a platform that allows is fully interactive without
being driven to a call center. And, with olive there is no waiting period. You can quote today and be covered tomorrow. Best of all, our products, customer service, and reputation for excellence have earned us an A+ rating with the Better Business Bureau and we have partnered with some of the insurance industry’s largest companies to back us. We’re in the business of helping you live life covered!
We hope we helped to line out the differences and the benefits to buying an extended warranty for your used car. It is a lot to take in. There is no rush, take your time, do your due diligence, and know that a good company will be transparent with their pricing and will help you through the process. It should be easy, not difficult.
Best of luck car and warranty shopping!
Take your insurance coverage to the next level at gogetolive.com. If you have additional questions feel free to call one of our Coverage Advocates, they are available Mon – Fri by calling 866.822.8691.
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