Don’t Buy Extended Warranty from Dealership

Reader question:

I’m going to buy a new car. When buying a new car, should I get my extended warranty through the new car dealer?

Ron

No!

That is probably the worst place you could buy your extended warranty at when you buy your new car. I know it sounds a little extreme, but you want to limit your dealings with dealerships as much as possible. They will lie and they will often be the ones who offer you the worst deal on everything. You have to fight to get a good deal on anything when buying a new car through a dealership.

What do car dealerships do in this case? First things first, they generally charge twice as much as other places that sell warranties on new cars. Not only will they charge twice as much, but while charging you that much they will probably only offer you with a warranty coverage for mechanical breakdowns, when you need both mechanical breakdown and wear and tear. If you get an extended warranty through them, you’ll have to get it right when you buy the car, when you might not be able to. Many places will sell it to you at anytime.

The worst thing about buying an extended warranty on your new car through a car dealership is that you can’t check up on them. You don’t know how they operate, and you have to trust their word to find out how. You can’t know if how much things will cost, if they have the money to back them up when paying for any claims you may file, and you can’t know who their warranty administrator is.

Cheers,

Fashun Guadarrama.

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Austin Davis, consumer car repair advocate. "Hi there! I love to help people solve their car repair problems and I hope my site was helpful to you today. Thank you for stopping by."