Personal finance expert Dave Ramsey is famously outspoken against extended warranties. “On average,” he says, “you’ll pay about $1,500 on an extended warranty, and the average repair is $180. I don’t recommend buying extended warranties, ever. If you can’t afford a $200 repair on a car, then you can’t afford the car.”
What does Dave Ramsey say about extended warranties?
“The fact is, extended warranties are overpriced. That’s the reason people sell them, because they make a bundle on them in commissions,” says a money expert and radio talk show host, Dave Ramsey. “I don’t recommend buying extended warranties, ever.
Why should you never buy the extended warranty?
While it may sound like a good idea in theory, extended warranties often come with a high price tag and don’t necessarily cover everything that could go wrong. Plus, many people who buy extended warranties never use them. In that case, an extended warranty becomes a cost with no financial return.
Are extended warranties on cars a good investment?
If you only plan to have the car for about three years, then it would be essentially a waste of money to opt for the extended warranty since you won’t even have the vehicle anymore. However, if you plan to keep your car for years to come, an extended warranty might be a good investment.
What are the advantages and disadvantages of an extended warranty?
Extended Car Warranty Overview
|Extended Car Warranty Pros||Extended Car Warranty Cons|
|They can increase your vehicle’s longevity.||There’s a chance you won’t need the coverage.|
|You can save on costly repairs.||Every contract has its exclusions and limitations.|
What is a fair price for an extended car warranty?
What’s The Average Extended Car Warranty Cost? Based on our research, the average extended car warranty cost is about $2,550, though it can range from $1,000 to $4,500 or more depending on the plan.
Should you buy the extra warranty on a used car?
In general, we don’t recommend buying an extended warranty on a used car. … This means you’ll likely spend more on the extended warranty — $3,000 or more, in some cases — than any repair costs your car may accrue during the period when the warranty stays valid.
Why do I keep getting calls about my cars extended warranty?
“This is an illegal robocall and likely a scam,” the agency warns. “The companies behind this type of robocall are not with your car dealer or manufacturer, and the ‘extended warranty’ they’re trying to sell you is actually a service contract that often sells for hundreds or thousands of dollars.”
What is the best auto warranty company?
Top 5 reputable extended car warranty companies
|Extended Warranty Provider||Our Award||Overall Rating|
|#1 Endurance||Most Comprehensive Coverage||9.2|
|#2 Carchex||Great Industry Reputation||8.6|
|#3 Protect My Car||Most Maintenance Plans||8.5|
|#4 CarShield||Most Affordable||8.4|
Does extended warranty cover engine replacement?
An extended car warranty acts like an insurance policy for your car’s major components. … But in general, extended warranties cover the critical mechanical parts of your vehicle, including the engine, transmission, axles, and gaskets.
Is Gap Insurance Worth the money?
If there is any time during which you owe more on your car than it is currently worth, gap insurance can definitely be worth the money. If you put down less than 20% on a car, you’re wise to get gap insurance at least for the first couple of years you own it. By then, you should owe less on the car than it is worth.
Can you cancel a extended car warranty?
You can cancel an extended warranty at any time and you’ll get a prorated refund for the unused portion of your policy. If the warranty was included in your loan, your car payment won’t drop, but you may pay off the car sooner after the refund is deducted from your balance.
Does AAA have extended warranties?
Avoid unexpected, costly repairs on your new or pre-owned vehicle with an extended warranty from AAA. Our cost-effective plan options extend coverage to virtually all mechanical and electrical components after your original warranty expires. AAA Vehicle Protection Program Warranties are competitively priced.
Can you cancel extended warranty after purchase?
Some warranty providers stipulate a strict time period, usually between 30 and 60 days, in which you are allowed to cancel your extended warranty without being charged any fees. … If you paid for your warranty in full and choose to cancel after the cut-off period, you should still be able to receive a prorated refund.
What is the advantage of extended warranty?
By spending a little money on the purchase of an extended warranty, you can save a lot of money spent on potential repairs and maintenance. Depending on the type of coverage opted by you, a serious breakdown can make you spend much more than anticipated.
What does extended warranty mean on a car?
A vehicle service contract, which is commonly known as an extended warranty for car owners, is an optional protection plan you can purchase to help cover repair costs. An extended vehicle warranty typically starts once the manufacturer’s warranty expires, but in some cases, the two protection plans overlap.