What is an extended warranty and when should it be purchased on a car?

What will be an ideal response?


An extended warranty offered from an automobile dealer and is an option that may be purchased that ensures that the dealer will fix any covered item for the length of the extended warranty. In most cases, extended warranties are overpriced, with huge profits for the dealer. On average, few people reap the full benefit of the warranty relative to its high cost. You may justify the cost if the extended warranty provides you peace of mind. Like all insurance, it's something you buy with the hopes of never having to use it. You're buying protection from financial catastrophe–or at least, in this case, from significant financial heartburn. Just as with all aspects of car buying, make sure to do your homework and research extended warranty coverage and prices. Imagine how surprised the salesperson will be when you arrive at the dealership armed with printouts of third-party warranty offers and negotiate from there. Never pay the full asking price of an extended warranty, as these prices are also negotiable.

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