Why Purchasing a Vehicle Service Contract Makes Financial Sense

For many people, the purchase of a motor vehicle is one of the most expensive investments they will ever make.  With that in mind, it pays to take whatever steps are necessary to protect that investment and make sure it provides a reasonable amount of returns.  This is where the concept of an extended auto warranty comes into play.

The Basic Idea Behind the Warranty

Since all new and most pre-owned vehicles that have been restored to factory standards come with a standard warranty, it is not unusual for consumers to question the wisdom of paying extra for an extended auto warranty.  The thing to remember is that this type of warranty picks up where the basic warranty leaves off.  As the provisions within the basic plan expire, our extended plan will continue for a longer period of time.

Why is the Extra Time So Important?

Basic warranties do cover a reasonable range of services and support, but there are limits in terms of time and total mileage on the vehicle.  The fact is that many motorists exceed the allotted mileage long before reaching the time limit. For people who use their vehicles extensively, it is possible to reach that mileage limit in less than half of the time frame.  At that point, the basic warranty is basically no longer in effect.

Since the extended warranty ensures that those benefits continue for longer than that initial time or mileage limit, the owner can retain coverage for more years.  The result is that if a component covered under the warranty terms breaks down due to a manufacturing defect three months after the basic warranty has expired, the part can still be replaced at little to no charge under the provisions found in the extended auto warranty.

What About the Expense?

Whether the extended warranty is purchased from the auto manufacturer or from a third party provider, there will be some expense involved with the transaction.  One way to keep that cost in perspective is to consider it a form of preventive maintenance for the vehicle.  While the hope is that there will never be any reason to invoke one of the clauses in the warranty plan, it is nice to know that there is coverage in place if it is needed.  That peace of mind will easily justify the expense of securing and maintaining the extended warranty.

Even if one covered event does take place, chances are that all the money paid toward the extended auto warranty will still be less than that one event.  This is true even if that event takes place several years after the purchase of the vehicle and the expiration of the basic warranty.  For people who tend to drive their cars for the better part of a decade before trading them in, having that extra coverage in place makes a lot of sense.