So many people have asked these questions, and people’s skepticism regarding extended warranties is so much that they end up losing so much money.
Every time someone tries to sell us something, we think of it as a scam or a trick to squeeze money out of our bank account.
But not everything sold to you is worthless, and not every time someone pushes you to buy something is a call for help.
Sometimes, things make sense, and you shouldn’t have a problem with someone else’s profit if you are being benefited in the process too.
So yes, buying a warranty from a dealership of used luxury cars helps them make a few bucks, maybe, but the better question is- do they help you too?
And this blog is all about answering this burning question of yours.
So let’s dive in, shall we?
What are extended warranties?
As the name suggests, extended warranties are an extension of the standard warranty provided by the manufacturers. Or in many cases, third parties like dealerships of used luxury cars themselves offer extended warranties on their product for an extra cost. That covers the insured for any repairs and replacements of the parts. Subject to the dealer or the package, the coverage varies. While some packages are exhaustive and cover everything from the powertrain to the electrical system, some might be very constrictive.
Note that, unlike third-party insurance, an extended warranty is not mandatory.
What are the different kinds of extended warranties, and which one should you get for your used luxury cars?
- Manufacturer’s warranty- manufacturer or factory warranty is provided by the manufacturers when the car is purchased first hand. Since the manufacturers provide these, these warranties provide exhaustive coverage to major parts of your vehicles.
- Standard warranty- when you purchase directly from the lot, manufacturers usually provide a standard warranty for two years or certain kilometers, whichever comes first. Usually, the dealers at the lot try to sell you an extended warranty over your standard warranty. You can think of the standard warranty as a basic package and the extended one as an upgrade. Both of these are different and have different coverage. Upgrading your package during the life of your standard warranty can get you cheaper deals.
- Bumper to bumper- this is the most detailed warranty plan that you’ll ever get on any vehicle. This warranty covers everything from the car’s powertrain to the electrical system and regular wear and tear. Since this package covers almost every important part of the vehicle, it gets real easy on the pocket for you to get those parts replaced in case anything goes wrong.
- Powertrain warranty- powertrain warranty covers powertrain only. Even then, it’s beneficial because the powertrain incorporates important parts like the transmission, engine, and a few mechanical parts.
- Corrosion warranty- corrosion is hard to manage for cars, and the manufacturers know this. This is why many manufacturers like BMW provide corrosion or rustic warranty on their products. BMW specifically provides a rust perforation warranty on cars sold after 2010 for up to 12 years for unlimited mileage.
- Paint warranty- luxury cars are all about looks, and this is why many manufacturers like BMW also provide a paint warranty on their vehicles. Which is to ensure the consumer is saved from unnecessary losses. However, these warranties are for a shorter duration of 2 or 3 years and are subject to a few conditions. Like the damage should not be a result of any external influences.
- Third-party warranty- third-party warranties are provided by dealerships of used luxury cars or private companies. It’s recommended that you buy your extended warranty from the dealership if you are buying a used car because there is better negotiation scope.
Goodwill service through the manufacturer- imagine you bought a brand new car from a lot. Just after the warranty expired, a major issue occurred, which may be something that many other owners of the same model are facing. You might not know this, but the company does. Hence they would not risk their goodwill and fix the car. Therefore, never shy away from dialing the original manufacturer’s number whenever your car gives you trouble.
Do companies from which you buy extended warranties pay for your repairs?
Yes and no. Yes, if the car is in good condition and has been maintained well. No, if the warranty doesn’t cover it and the loss is because of your negligence. A warranty is a contract between the buyer and the seller, and a contract has terms and conditions. You might not like this, but you are supposed to read them! Period. You can’t say someone had frauded you when you were given a chance to ask questions and read the contract throughout. And by not doing these things, you probably chose to stay in the dark.
So the point is, read the terms thoroughly and ask questions. Also, here are a few pointers you should not miss if you want to claim damages in the future.
- Fluids- make sure you use the fuel as specifically mentioned by the dealer. For instance, if you’ve been using a fuel that is maybe good but not what has been specifically told to you and god forbid your car engine gets blocked- you are not getting the coverage on this one. The reason is you were negligent on your part, and the company doesn’t owe you anything for that.
- Keep a record of servicing at authorized centers- if you want to raise any claim in the future, do not ever for even once take it to a local mechanic. We recommend that you don’t even bother to check it yourself and do anything that might be termed as “temperance.” These authorities frown on local service centers because they don’t keep knowledge of luxury cars. And any parts changed or tempered could void your warranty.
- Extreme modifications temper with major parts- again, if you modify your car, do not tamper with important parts. If anything goes wrong with those parts in the future, the dealership of used luxury cars isn’t liable because you chose to do it knowing they aren’t really good for your car.
How is an extended warranty different from car insurance?
People often get confused between these two as they think both merely reimburse in ways for losses. But the fact is insurance is a broader concept than warranty. It is true these two reimburse for the car’s damages but in different ways.
For instance, if you ever get into an accident and damage your car’s bumper and if you’ve got a comprehensive insurance plan, then your insurance company is liable to reimburse you for that damage.
But if your car engine got damaged due to regular use, then your warranty comes into play.
Moreover, insurance covers many more things subject to your premium amount—the higher the premium, the better the coverage. If we talk about the most comprehensive insurance plan, then in an unfortunate accident, you, the passengers, your car, the victim’s car, and the victim himself are also covered. Not to mention, unlike a warranty, third-party insurance is mandatory as per the country’s laws.
Why should I buy extended warranties?
- Protection against failures- extended warranties work as a shield to your newly bought used luxury cars. Since many packages cover the car’s powertrain and many other important parts, it’s easier to replace them at authorized centers. This further assures you that the damaged parts will be replaced with original variants only as we all know what fake parts could bring.
- Satisfaction throughout the car’s life- since the car is under warranty, chances are you will only get it serviced at good service centers, and all the wear and tear of the car will be handled with care. That assures long-term satisfaction, which is impossible if you keep taking the car to less reliable service centers.
- Cost-effective- when you go for an extended warranty, you pay what you are liable for firsthand at the lot. So whatever fixes come up, later on, are to be borne by someone else and are therefore not your headache. The money charged for the warranty is all you have to pay to get the essential parts of your vehicle covered. We are talking about good money here because luxury vehicles have premium quality parts, and to replace those with original counterparts, you would have to spend a lot.
- Car’s life extends- luxury cars have a very good life expectancy, and if they are maintained well, they can do you no wrong! This is why when you get coverage for your vehicle’s parts, the car’s life extends, and you keep getting the satisfaction you got from the car the very first time.
- Good buyback value- good maintenance always does you good. And even when you want to buy a new one, your efforts pay you back. Cars that stay in good shape can be traded with the dealerships that take in used luxury cars subject to their terms and conditions. So don’t you worry, if you get bored of your ride, you can trade it in and get yourself a new variant? But note that only well-maintained cars are eligible for trade-in- so ensure you keep good care of your used luxury cars.
Where should I buy extended warranties?
Depending upon your requirements, you can choose from where you want to buy an extended warranty. If you are purchasing first hand, without a doubt, go for a manufacturer’s warranty and buy an extended one too right there. But if you are buying a used luxury car, you prefer buying it from the same dealership. Also, check if the variant already has a standard manufacturer warranty since you can get an upgrade from the manufacturer on this one. Many private companies today sell extended warranties; you can also check out a few packages there. But since it’s run privately, look for credible companies and go through the terms thoroughly.
What should my car’s extended warranty cover?
Before you settle for any packages:
- Research properly. Go through your car’s history, mark anything that might look suspicious, and note any previous breakdowns.
- Dig deep into the inspection sheet and look out for any parts that might have any failure history. This way, you can prioritize the parts you want to include in your coverage.
Apart from this, every major part like the engine and transmission is covered in warranties. All you have to do is check which one is covered and which one isn’t.
Here’s a checklist of important parts for your reference-
- Electrical system
- Air conditioning
- Brake system
- Steering and suspension system
You need to ensure that your package covers these basic parts.
When can you buy an extended warranty?
Manufacturer warranties are provided on the spot when you purchase the car. You can extend the coverage to a few years by upgrading it then or later when your standard warranty is about to expire. Apart from the manufacturer warranties, you can opt for third-party warranties whenever required. But one thing you need to remember is that the older the car, the more difficult it is to get a warranty that provides good coverage. So don’t let it age and get a package the soonest.
If you trade in used luxury cars, then what happens to the extended warranty?
- Get it transferred- if you are selling your car to a private seller, you can benefit from it. Contrary to how the refund works, selling can be very easy. All you’ve got to do is raise your charges. Look, you have a car that has been maintained well and has a running warranty. Since the car was under warranty, you only got it serviced at authorized service centers that indirectly extended the car’s life, which is a much better deal than any roadside junk. So, quote a little higher and get yourself reimbursed for all the pain- also, since the person gets a running warranty, it’s a win-win.
- Get it refunded- if you haven’t raised a single claim with the company yet, chances are you can get the refund. Although, the process of getting the refund could look a little hefty because why would someone want to return your money? But make sure to get refunded even after minor deductions.
Do dealerships make money selling warranties?
Maybe yes, maybe no. Honestly, it shouldn’t matter. Did you ask this question when you stepped in to buy the car? No, right? Because you wanted to buy the car. As humans, we tend to doubt things others put in our heads. So breathe a little and don’t stress over things that don’t matter. Every business is there to make a profit at the end of the day.
That’s all about extended warranties. Hopefully, we’ve answered all your questions regarding this, and you are no longer in the dark. One thing you can do is go for dealerships and subtract all this hassle in one go. But make sure you choose a credible one since credible car dealerships like Kings Auto ensure customer satisfaction to its best.
So don’t forget to check out Kings Auto’s collection of best pre-owned luxury cars; we swear you’ll fall in love!