If you’ve ever bought a vehicle in Canada, whether a used car or a new one, you know that at some point during the arduous sales process, you will have to face the dreaded question, “would you like to purchase the extended warranty?” Well, maybe it’s not that simple. Traditional Canadian dealership finance guys will sit you down and (basically) make you fear for your financial well-being by listing the most expensive repairs your vehicle might need and leaving you with no choice other than to sign the dotted line for the vehicle warranty on your new car. We’re not going to say they aren’t right in a lot of what they are saying; we’re just letting you know to be wary, as there are often some lucrative kickbacks from warranty companies when a customer purchases one.
Don’t take this as us telling you not to purchase the extended warranty coverage because it’s like insurance, whether car insurance, house insurance, or travel insurance. You hate paying for it, but when you have to use it, you’re glad you did. So, you could look at the extended car warranty as an insurance policy or protection plan that gives you peace of mind and just factor it into the cost of owning a vehicle and just roll it into the vehicle purchase price. We’re not here to tell you either way whether or not to purchase a third-party warranty; we’re just providing some information so you (as a car owner) can make an informed decision on if the warranty cost is worth it.
Car Repairs and Length of Ownership
Before committing to an extended warranty, do some simple calculations. Try and determine how many years you think you will drive the car and multiply it by the average cost of yearly repairs. On average the repair cost of $1500 is required for every 20,000kms. Once you have that number, compare it to the cost of the warranty. If you are buying a brand new car, read the fine print on the manufacturer’s warranty, as you may not even need to look at extended warranty options. If you are buying a used vehicle, the factory warranty may still be valid, and in that case (and depending on how much is remaining) you may reconsider jumping into the purchase of a used car warranty.
If you are purchasing a used vehicle and it does have warranty coverage remaining, double-check to ensure the warranty covers the vehicle, and not the driver. Some automakers such as Hyundai, have an amazing manufacturer’s warranty, but that warranty can’t be transferred to the next owner, meaning it is worthless to the second owner.
Research
As part of your initial research on the vehicle(s) you are considering, be sure to look at common vehicle repairs with that particular car. If you notice a lot of expensive repairs, you might want to consider a different vehicle or purchase an extended warranty. If it is known that the car you are looking at is notorious for spending time in a repair facility, there’s a high probability the extended warranty will cost a lot of money.
Familiarize yourself with various warranty providers and what the warranty options are. The most common types of extended warranties are powertrain warranty, comprehensive warranty, service contract, and bumper-to-bumper warranty plans.
Coverage
This may seem obvious, but we don’t want to assume anything. Ask a lot of questions before deciding on the warranty option. The biggest thing is knowing what it covers. We aren’t warranty experts, but we can tell you that everyday wear and tear and regular maintenance aren’t covered under warranty. We’re talking about oil changes and brake pads, as those are common items that need to be addressed regularly.
If you are one of those car owners who love to do a bunch of modifications to your vehicle, you may want to think twice as many warranty plans won’t offer reimbursement or cover repairs on aftermarket additions. When reading the fine print, carefully review the exclusions section. If you plan to take long road trips, it might be worth your while to look at a warranty plan that offers roadside assistance with towing, for those “just-in-case” situations. Lastly, find out what the deductible is every time you take it to a repair shop.
Paying for Your Warranty
So, you’ve committed to buying the car, you’ve budgeted everything in, and then BOOM, you’re seduced into adding a warranty package. Not a bad idea, but the beads of sweat are rolling down your face as you try and figure out how you will pay for it. After all, the average cost of an extended warranty package is $1000-$3000. Take a deep breath. You have the option of paying for it upfront or you can add it to your car loan. Speaking of car loans, this is a great opportunity for us to do a plug. Did you know that you can do all of your vehicle financing online with us, without ever leaving your home? Yup, that’s right, and you can start right now by getting qualified with zero impact on your credit score. That’s not the only easy thing about buying a car from FFUN Cars - you can do the entire process online, in-store, or a combination of the two. Really, it’s all about you and your convenience. One of the many benefits of FFUN Cars is you can start the process of buying a car online by browsing the up-to-date inventory. Thinking about a warranty? We got you covered. All of our vehicles come with a limited extended warranty and a 24-hour test drive, plus we offer a 30-day money-back guarantee.
