Is Buying an Extended Warranty Worth the Price Paid? [Opinion]

Extended warranties are rarely worth your money. Products don't break on their own, and when they do, the price of repairs is usually lower than what you'd spend on an extended warranty. ... But take a moment to ask yourself why a company would offer you an extended warranty. The answer is: because they're profitable.

1. Is it worth buying extended warranty?
2. Does it make sense to buy extended car warranty?
3. Can you negotiate the price of an extended warranty?
4. What does Dave Ramsey say about extended warranties?
5. How much should an extended warranty cost?
6. Can I buy extended warranty later?
7. Who has the best extended car warranty?
8. What does bumper to bumper warranty not cover?
9. What does Ford bumper to bumper warranty cover?
10. How much do dealers make on extended warranties?
11. How much should I pay for an extended warranty on a used car?
12. How much do car dealers make on extended warranties?

Is it worth buying extended warranty?

While it may sound like a good idea in theory, extended warranties often come with a high price tag and don't necessarily cover everything that could go wrong. Plus, many people who buy extended warranties never use them. In that case, an extended warranty becomes a cost with no financial return.

Does it make sense to buy extended car warranty?

If you hope to keep your car for 10 years and it only comes with a three-year/36,000-mile warranty, you might consider extended warranty coverage for peace of mind for the first couple of years after your new car warranty expires. ... If you see low scores, that's a hint that an extended warranty might be a good idea.

Can you negotiate the price of an extended warranty?

However, you can and should negotiate the cost of any extended warranty plan. The finance manager will typically receive a commission for selling an extended warranty. When included as part of your vehicle purchase, the price offered may be the full retail price plus a considerable mark up by the dealer.

What does Dave Ramsey say about extended warranties?

Well, the worst thing about an extended warranty is that it is overpriced. ... In fact, about half of what you pay goes to the salesperson's commission.

How much should an extended warranty cost?

Extended Car Warranty Cost

The average cost of an extended car warranty is $1,500. The exact price can vary widely between policies, however, usually falling between $1,000 and $3,000. There are several factors that affect how much an extended car warranty is going to cost.

Can I buy extended warranty later?

It is important to note that you have the option to purchase this auto warranty any time before the manufacturer warranty expires. You can even purchase an extended warranty after the manufacturer warranty expires, although the price will go up considerably.

Who has the best extended car warranty?

12 Best Extended Car Warranty Companies

What does bumper to bumper warranty not cover?

Parts not covered by a new vehicle bumper to bumper warranty are mainly wear items ie. parts of the vehicle that deteriorate through constant use. Not covered, are parts such as wipers, tires, brake pads, brake rotors, light bulbs, and window glass. ... Racing or competing in the vehicle will also void the warranty.

What does Ford bumper to bumper warranty cover?

What is covered under Ford Bumper to Bumper Warranty? Ford Bumper to Bumper warranty covers 3 years or 60,000 km on all parts. All parts on Ford vehicle that fail during normal use due to a manufacturing defect in factory-supplied materials or factory workmanship.

How much do dealers make on extended warranties?

The dealer will likely make a counteroffer. "A fair profit margin for dealers is between $200 and $500 over their cost," Weintraub said. Here's another tip: When they're selling extended warranties with new cars, dealers often talk about the overall monthly payment for the deal, not the cost of the warranty itself.

How much should I pay for an extended warranty on a used car?

The price of coverage is dependent on which driver and which vehicle is applying for the coverage. Typically, the average extended warranty for used cars cost ranges from $350-$700 per year, but every person and policy is different.

How much do car dealers make on extended warranties?

These products typically feature even higher margins: On an extended warranty of $2,000, the dealer makes up to $1,000 in profit. On a $700 GAP insurance policy, the dealer usually makes up to $550 in profit.