Owning an automobile involves spending money long after the initial purchase is made. There are costs to maintain and repair the vehicle throughout the term of ownership. To minimize out of pocket repair expenses, car owners can purchase an extended auto warranty. There are different coverage levels and deductibles and each plan carriers a different cost.
An extended auto warranty may include powertrain, comprehensive, or bumper-to-bumper coverage. Bumper-to-bumper auto warranties are the most inclusive, which means they are also the most expensive. The powertrain plan is the least expensive, perfect for owners of older vehicles with high mileage who do not want to spend much money and need only major repairs covered.
Purchasing an extended auto warranty through a dealership is more expensive than buying it through a private agency. The dealer receives a large commission when it sells these contracts. A private agency works directly with insurance companies, enabling it to take advantage of economies of scale and eliminate the large commission component.
The cost of an extended auto warranties depends on the age, mileage, make, and model of the vehicle, the level of coverage, and the deductible amount. For a used car, the cost can range from $65 to around $3,500. New car service contracts can cost $1,500 or more when sold through a dealer. Deductibles commonly range from zero to $100, with a zero dollar deductible plan being the most expensive. The extended warranty may be renewable or transferrable to another private party.
Vehicle owners should consider an extended auto warranty if they want to reduce their potential out of pocket costs after the initial service period has ended. There are several plans and deductibles to choose from so the car owner should be able to find something within the budget. Getting thes