Many drivers these days prefer leasing their vehicle. If the lease term stays within the factory warranty term, then extended coverage might not be needed. But many leaseholders are extending their terms longer than ever. There’s been a recent 18 percent rise in long term leases, and nearly a quarter of all auto lease contracts are over three years old. In these cases, an extended warranty can deflect high repair costs.
Leasing a car for more than three years? Your factory warranty might be expired. Get a free vehicle protection plan quote from CARCHEX today.
Leasing And Extended Warranties
If you lease a new car, the factory warranty covers any mechanical repair not due to accident, abuse, or normal wear-and-tear. The factory warranty is a coverage plan provided by the original manufacturer of the car (Ford, BMW, Toyota, etc.).
Once the factory warranty expires, all repairs are paid for out of your pocket. Some drivers erroneously assume that leasing automatically provides vehicle protection as well. But lease and warranty terms are completely independent of each other.
Let’s say your lease has a three year term and the vehicle’s factory warranty term is also three years. This means that during the time you hold the lease, your repairs are covered. But what happens if you renew your lease? The factory warranty is not automatically renewed. The dealer may have extended warranty options but you may be limited in coverage and payment options. Your best option? Get an extended vehicle protection plan also known as a vehicle service contract.
Extended Vehicle Protection
These plans are very similar to factory warranties. Extended Vehicle Protection Plans also cover the engine, transmission, drive components, and many other parts. Some extended vehicle protection plans also cover wear-and-tear which is usually not covered by factory extended warranties.
Some other advantages of extended vehicle protection plans are:
- No haggling about repair prices. Providers pay directly to the repair shop.
- Cost of plans, in most cases, is less than the out of pocket cost to repair
- Rental car provided while repairs are being performed
- Roadside assistance and trip interruption benefits
- Protection against the rising cost of auto parts
- Freedom to take your vehicle to any licensed repair facility
It’s Not Insurance, But It Keeps You Covered
Extended Vehicle Protection Plans are not car insurance, but they can be thought of as protection against unexpected breakdown costs. If you are extending your lease, your vehicle is older and more likely to breakdown. An extended vehicle protection plan makes sure these repair costs are covered.
Dealer Extended Warranties
If you leased from a car dealer, they might try to sell you an extended warranty when the factory warranty expires. In many cases, dealer based warranties are more expensive and lack coverage for older vehicles. It pays to shop around, and don’t feel pressured to buy vehicle protection from the dealer just because they provide the vehicle leasing contract.
Protect yourself from unexpected car repair costs. Get a free extended vehicle protection plan quote from CARCHEX now.