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(ARA) - Buying a used car can save you thousands of dollars versus buying a new one. What many used car buyers fail to consider is the repair costs after the car’s original warranty expires. These can quickly add up and may even exceed the money you initially save. So what do you do if your car’s warranty will run out soon after you buy it?
Larry Gamache of Carfax suggests investing in an extended warranty. Any number of mechanical problems can occur after the manufacturer’s warranty expires. Extended warranties can help defray unexpected, costly repairs.
If you plan on owning the car for several years, it’s a good bet that it’ll require an occasional fix during that time, at least from normal wear and tear. Nowadays, average repair costs are around $500 and more intricate repair issues, such as engines and transmissions, can run you several thousand dollars before all is said and done. While extended warranties won’t cover everything, they’re a good insurance policy to protect you from footing the bill for any major (and expensive) problems that may arise.
Chris McManes, who recently bought a late-model used car with a soon-to-expire original warranty, says he considered extended coverage but wasn’t fully convinced until he saw a $1,700 repair bill. “I needed some work done on the minivan I bought, which luckily was still under warranty and covered the costs to fix it,” he said. “When I saw how much the repairs cost, I was convinced that purchasing an extended warranty was the best way to protect myself from the possibility of paying another high repair bill out of pocket.”
Different warranty coverage plans exist based upon your need. Here are a few tips to get you started:
* Get a Carfax Vehicle History Report at carfax.com. Besides providing a detailed history, the report will help you find out how much of the original manufacturer’s warranty exists.
* Use the Internet to research companies offering extended warranties. Avoid low-cost/budget warranty providers. You can find recommended warranty providers by visiting sites like edmunds.com and consumerreports.org.
* Choose the plan that best fits your needs and budget. Higher deductible plans are cheaper, but may come back to haunt you if your car needs frequent work.
* Read the contract thoroughly to fully understand the extent of coverage being offered. Most extended warranties will cover the vehicle’s major components and may be transferable should you ever decide to sell the car.
While an extended warranty can be a major investment for a used car, it may help extend the life of your vehicle, increase its resale value and save you money in the long run.
Courtesy of ARA Content