Here are some negotiation methods an expert negotiator uses while looking for an extended warranty.
- Do you understand what is covered?
An extended warranty is not all-inclusive. For example, most vehicle extended warranties do not cover wear-and-tear parts (things that will ultimately break or wear out).
To make matters even more complicated, many extended warranties are divided into coverage tiers — silver, gold, and platinum, for example — each with its price and degree of coverage. Take the time to read the small print to figure out what isn’t covered.
It would also help establish who will pay for the repair costs. For example, is the cost of the repairs covered? Is there a small deductible to pay? Or do you have to pay for the repairs yourself and get paid later?
Finally, will you be able to take the vehicle to any repair shop? Some third-party auto warranty providers restrict repairs to the dealership or repair business named in the contract.
- What is your track record when it comes to repairing costs?
Have you ever had a car with faults that a warranty would have covered? Consider how many times you’ve had a flat tire if you’re considering a road-hazard tire warranty, for example. If there’s a lot of debris on the roads in your neighborhood, or if you’ve had multiple flat tires in a short period of time, a road-hazard warranty might be worth considering. However, if you can’t recall the last time you had a flat tire, you may not require the coverage.
You can also add up how much you’ve spent on out-of-warranty repairs in the past and compare the total to the warranty cost. For example, if you’ve paid $500 for out-of-warranty repairs, compare that to the cost of the extended warranty.
Of course, no two automobiles will ever have the same repair history. However, if you are purchasing a vehicle from the same manufacturer, it can indicate what to expect.
- Do you truly require this warranty?
Some F&I representatives may make you feel that declining the extended warranty is akin to playing Russian roulette with your vehicle. You never know when the expensive repair bullet will strike. However, new cars are more dependable than ever before. Furthermore, the data appears to imply that most consumers may not require an extended warranty.
According to the most recent J.D. Power research, total vehicle reliability has been improving for the first time since 2013.
You can self-insure if you still want an extra layer of security. Dave Ramsey, a financial guru, recommends saving aside half of the cost of a warranty and utilizing that money to cover any unexpected car repairs.
No matter what counsel they receive, some people are either unwilling to take risks or prefer the convenience of an extended warranty. They’re more at ease knowing that any major repairs would be handled. Nothing is wrong with that. If you’re a belt-and-suspenders type, make sure you ask the correct questions before purchasing an extended warranty.
