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Should You Get an Extended Warranty on a New Car?

Do not let that new car smell fool you! Once you drive off the car dealership, your brand new automobile is now considered a used car. Contrary to what some people might think, buying a vehicle either new or used is not considered an investment. You get a car because it helps you to get where you’re going on time and most efficiently.

If you intend to finance your vehicle purchase, then I suggest you go with a brand new one. All brand new automobile comes with a standard warranty that averages out to about 3 years/36,000 miles to 5 years/50,000 miles.

The best time to decide if you’ll need an extended warranty is when you’re at the dealership. Are extended warranties on new cars worth it? The answer will depend on your plans with your new car purchase.

Are extended warranties on new cars worth it

If you plan on keeping the vehicle way past the initial standard warranty period, it makes sense to buy an extended bumper to bumper warranty. While you might think your new car will last a while before needing repairs, there are several factors you need to keep in mind.

All new cars and trucks are made with parts, and most of the parts will need to be replaced based on your driving and maintenance schedule. Most of the mechanical parts in your car will only perform for so many miles or years before they need to be replaced.

Some of the factors you should consider

How long do you intend to keep the automobile? If you intention is to trade or sell the car or truck before the warranty runs out, then it makes no sense to buy an extended warranty. Although if you had one, you might be able to get a better value if you sell your car privately or to the dealer.

What is the condition of the roads in your city? If your city is full of potholes, better to get an extended warranty. Every pothole you encountered takes a toll on the performance of your car. The major components of your car might not last as long if the roads around you are not well maintained.

The type of car you’re buying should play a greater role in your decision to either buy an extended warranty or not. On the average, American cars are cheaper to fix than most foreign cars. If you buy a new BMW, it would be wise to invest in an extended warranty due to the high repair cost.

Should You Buy your Extended Warranty From the Dealership?

Like it was explained in this article here – buying additional products from the dealership will substantially increase your total new car cost. If you’re financing, your increased cost might not be so visible if you only pay attention to the monthly payments.

To buy your extended warranty from the dealership you need to first settle on the new car price and the financing terms, before discussing extended warranty options. Most vehicles now come with at least 33 years/36,000 miles of bumper to bumper coverage.

Most automobile manufacturer would send you an extended warranty purchase option within a few months of your purchase. I would suggest you try to haggle the price for the extended warranty down if you’re getting it from the dealership. If you look at it as a separate item, you’ll not overpay.


From my experience selling cars, extended warranties should be considered if you’re going to keep the new car far longer than the standard warranty period.

Consider the condition of the roads in your area as you make your decision. Remember, an extended warranty can be transferred to another owner if you sell your car, and that should help you get a better price.

Better to buy your extended warranty from the original maker of your vehicle rather than third party firms. If you’re buying a Toyota, make sure your extended warranty is written by Toyota.

Third party extended warranties are cheaper, but if the company goes out of business you’ll be left holding a worthless piece of paper.