Purchasing an Extended Warranty
We've all heard many times that a car is likely the second-biggest purchase we'll make after a home. Maintenance and repairs can also be expensive, and unexpected. Typically, you'll be three to five years into new-car ownership when the manufacturers warranty runs out. By then, you've clocked some kilometres and it's more likely things will go wrong from that point on.
The price of an out-of-warranty repair can easily be more than the cost of an extended warranty. I read an article where someone had purchased a used Touareg, then decided on purchasing an extended warranty because the vehicle may be in excellent condition now, but is known to have a major driveshaft failure issue in the first years of production. Out of warranty, it would cost a lot to fix.
What things should you watch out for?
- Service interval requirements
- Coverage (i.e. does the contract require maintenance and repairs be done exclusively at the dealership?) and the fine print in general as to what is and is not covered. The reputability of the warranty provider is also very important.
- Is it North American Wide?
- Are they insured and/or recognized by OMVIC or UCDA (this means is there coverage if they go out of business)
Most manufacturers warranties come with a 5 year 100,000 kms power train warranty and a 3 year 60,000 kms. comprehensive. Those warranties come with a new vehicle, and stay with the vehicle, regardless of the owner but start from the day they were purchased so time can be a factor because these warranties are whichever come first.
We have a couple different warranty companies we use here at our dealership. They are both covered and recognized by OMVIC.
We offer extensions to the manufacturers warranties, only at the time of vehicle purchase, such as extending the three-year warranty to seven years. Typically, they're more expensive and have to meet certain conditions.
The Aftermarket companies we use offer a diverse selection - from power train to full warranties. Prices and terms differ. Obviously, you'll pay extra for more coverage. In any case, again, make sure you check the fine print. Some warranties cover wear and tear on parts, while others only cover breakage.
The public have to understand that they have some obligations when they buy an extended warranty," says Bob Pierce, director of member services for the Used Car Dealers Association of Ontario.
If you find a reputable provider that offers acceptable coverage for an attractive price, an extended warranty can be a good insurance policy against unexpected major repairs. It's a fixed amount, so you can plan and factor that into your vehicle ownership costs up front. A transferable extended warranty is also good for the resale value should you wish to sell down the road.
Presleys Auto will find you the best Company or Coverage for your vehicle.