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Advantages and Disadvantages of Buying an Extended Car Warranty

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According to the 2017 Vehicle Dependability Study made by J.D. power and associates, most consumers do not consider a better warranty as the most important factor before buying a vehicle. However, the same study shows that according to the consumers, they consider the reliability and the durability of the vehicle as their top-most priorities. That much is common-sense. However, consumers are making a mistake if they ignore the benefits of an extended warranty.

In the research, it is found that though the reliability and better warranty are not being contrary concepts, they still share a significant gulf between them. This may be due to people valuing a car’s actual record of accomplishment for reliability, rather than thinking about whether someone else is going to have to pay the bills, in chances of a potential breakdown.

People nowadays are keeping a car for longer periods than ever before, and thus find an extended warranty appealing. Even the most of the generous of the manufacturer’s warranty expires after 10 years.

“In the current industry environment of record levels of leasing and long-term loans, higher residual values allow automakers to provide more competitive deals to buyers,” said Jonathan Banks, VP of Vehicle Analysis and Analytics at J.D. Power. “This creates the opportunity to achieve higher market shares and/or elevated profit margins.”

With an extended Endurance car warranty, consumers can freely extend their car warranties to fit their specific needs. Most extended warranties cover the costlier repairs than the original warranty, providing the consumers a better cost reduction for the repairs. Moreover, the best part of the process is that the consumers do not need to take care of the paperwork for the payment since the dealer does it automatically.

Even though there are many advantages for an extended warranty, these do not come cheap at all, and might be expensive than the original manufacturer’s warranty, provided these covers most of the repairs. They also do tend to be limited to only their approved repair-providers.

It is also notable that with the more advanced and tech-savvy the cars may be getting, these advancements do tend to increase the number of technology-related problems, contributing and leading to the worsening of the dependability of a car for a second consecutive year. With the appearance of self-driven cars and those vehicles powered by electricity, the price for a warranty extension will increase.

However, this increase in reliability is but a natural consequence of the market. The great thing about an increase in quality is that there are lesser complaints and claims. Lesser claims would mean risks are getting lower and the insurance or warranty provider will now start giving even lower premiums. “We find buyers are increasingly avoiding models with poor reputations for dependability so manufacturers cannot afford to let quality slip, particularly in their best sellers.” Said Dave Sargent, VP at Global Automotive, J.D. Power. He continues, “While many expensive and niche vehicles do have excellent quality, the fact is that most consumers are shopping in the high-volume mainstream segments. The good news is that consumers do not have to spend a lot of money to get a very dependable vehicle.”

Having a warranty extension may sound costly, but they are pocket change in comparison to the risks present. Plus, innovations have started to improve car quality, which in the long term will lead to lesser claims and to a lesser premium.