Benefits and Weaknesses of Car Warranties

Car warranty and car insurance are two completely different terms. Car insurance ensures your accidental damages; on the other hand, a car warranty protects you against the manufacturing defect occurring during the warranty period.

Types of car warranty

• New car warranty:

A car warranty is offered when you purchase a brand new car, termed a new car warranty. It is generally provided for the term of 1 to 4 years, depending upon the model and the company. This warranty covers the costs of repairs and replacements of faulty or broken parts due to manufacturing faults.

• Extended car warranty:

The warranty that you purchase for your car is an extended car warranty. It applies to the vehicle whose original manufacturer warranty period is completed. This warranty can be for 2-4 years after the completion of the original warranty. It can be purchased at the time of buying the car or after the completion of the manufacturer's warranty. 

Benefits of car warranty

• Easy repair and availability of faulty parts: 

Car warranty, either a new one or the extended one, makes repairs and changes of faulty parts easy and affordable. It makes the car manufacturer liable for providing parts that are not easily available in the local market.

• Peace of mind:

This is the most crucial benefit of the car warranty; it gives you peace of mind and keeps you content about the unannounced damages, warranty period services or lumpsum amount of expenses that have to be made.

• New warranties are provided at no costs:

An extended warranty might need to be purchased, but the manufacturer warranty or new car warranty comes with the price of the car. You do not have to pay any charges for the time of warranty given by the manufacturer.

• Resale value:

A car with a car warranty helps the buyer think that the car is well maintained. It makes for a better selling point and helps you sell your car at increased prices.

Disadvantages of Car warranties

• It does not cover all types of damages:

Generally, warranties come with the exclusion list. The purchaser is not aware that many parts are not covered in the warranty, and thus it becomes an extra expense to the buyer.

• It's not always financially worthy:

Sometimes your car does not require any repair in the warranty period, so purchasing a warranty becomes an extra expense. If you own a reliable vehicle that does not undergo a costly repair, an extended car warranty may not be worth paying.

• Tied you to your current car:

If you wish to sell your car in a few years or upgrade to a new car, the car warranty purchase will tie you up to your current car.

Car warranty and car insurance are essential parts of your car maintenance but always think wisely before spending money on car warranties. Car insurance is compulsory, but before buying the warranty, consider whether you wish to hold on to the car for the long term or not; whether the money you pay for purchasing the warranty is worth your car repair.