Dealerships always try to sell you an extended warranty when buying a new car. They’ll say it’s a good investment and might even make it sound like it’s required. But the truth is, you don’t need to buy a warranty at the dealership. For one thing, the coverage is often overpriced.

Shopping around for a third-party warranty provider can find much better deals. And even if you get a good deal on the coverage, there’s a good chance you won’t need it. New cars are more reliable than ever, and the chances of something going wrong are relatively low.

So unless you’re planning to keep your car for a very long time or drive it frequently in extreme conditions, an extended warranty is probably not worth the money. In most cases, it’s best to avoid the dealer’s offer and save yourself some money.

What is an Auto Warranty, Anyhow?

An auto warranty is a type of insurance that covers repairs or replacements on certain car parts and systems. Many new cars come with a factory warranty, typically lasting for three years or 36,000 miles (whichever comes first).

Some automakers also offer extended warranties, which provide coverage for a longer period. An extended warranty adds time to that initial warranty and may also be called a Vehicle Service Plan or Endurance Auto Warranty.

Dealerships Markup the Price of Warranties

When you purchase a car, the dealership offers you the option to buy a warranty. Though taking them up on their offer may be tempting, there are several reasons you should avoid doing so.

The first reason is that they mark up the price. Like anything else, dealerships mark up the costs of warranties to make more money. You can find the same security for less if you shop around.
In addition, many dealerships require you to use their chosen repair shop, which may not be the best or most affordable option.
If you end up moving away before the warranty is up, you’ve still paid for it without being able to use it.
Finally, most new cars come with a manufacturer’s warranty, so you may already be covered.

For these reasons, it is best to avoid purchasing a warranty at the dealership.

You Might Not Need a Warranty

Many people purchase an extended warranty when buying a new car, but there are a few reasons why this might not be the best idea. For one, if you’re buying a used car, it might still be under the manufacturer’s warranty.

And if you’re buying a new car, it will likely come with a 36,000-mile or 3-year basic warranty already. So unless you want towing or roadside assistance coverage, you probably don’t need an extended warranty. Additionally, extended warranties typically only cover major components of the car. So if something small, like the radio, breaks down, you’ll still have to pay for the repairs yourself.

Finally, extended warranties can be expensive, and there’s no guarantee you’ll use them. In most cases, it’s better to save up for unexpected repairs than to pay for an extended warranty that you might never use.

You Can Get Better Coverage Elsewhere

You’ve probably been offered an extended warranty if you’ve ever purchased a new car. For many people, the decision to buy an extended warranty is a difficult one. On the one hand, it’s an extra expense that may never be used. On the other hand, it provides peace of mind in case something goes wrong with the car.

If you decide to purchase an extended warranty, you do not need to buy it from the dealership. Many companies offer extended warranties for cars, and you can often find better coverage for less money if you shop around. When considering an extended warranty, read the fine print carefully.

Some warranties only cover certain parts of the car, and others have deductibles that must be met before coverage kicks in. By researching and shopping around, you can find an extended warranty that meets your needs and gives you peace of mind without breaking the bank.

A Big Scam – Most of the Time

Chances are, if you’re buying a used car, it won’t come with a warranty. And even if it does, that warranty is probably only good for a limited time and mileage. So, what do you do if your car breaks down? Do you buy an extended warranty from the dealership?

The bottom line is that you should avoid buying a warranty at the dealership—you can find better deals elsewhere. Warranties aren’t required, and chances are you don’t even need one. So do your research and shop around before deciding on an extended warranty for your car.

Many reputable companies offer extended warranties, and you can often find a better deal if you shop around. In addition, many credit cards offer extended warranty coverage on purchases made with the card. So, if you’re considering an extended warranty, be sure to do your research before making a decision.