If you are looking for information about an extended vehicle protection plan (sometimes referred to as a “car warranty”) then you might some hear opinions advising against these plans. Unfortunately, most of these arguments don’t consider all the factors involved. Let’s answer these doubts one-by-one.
Probability Of Using The Plan
There are a lot of numbers going around out there about the likelihood of needing to use an extended vehicle protection plan. Certain makes and models of cars are more reliable, making the possibility of a claim less likely. However, a warranty is like insurance. The average driver makes an auto insurance collision claim approximately every 18 years. Just because you don’t make a car insurance or an vehicle repair claim doesn’t make the coverage useless. In fact, approximately over 50% of vehicle service contract owners do make repair claims. In many cases, the covered repair costs can be thousands of dollars.
Cost Of Coverage Vs. Cost Of Repair
Another argument against all car warranty products is that the actual cost to repair is less than the cost of the protection plan. Again, these numbers are misleading. According to CARCHEX proprietary data, many car models actually have a greater cost to repair, so you save money with an extended vehicle protection plan.
Even if the average cost to repair is less, what if your car ends up being problematic? Let’s assume that a typical owner might save $500-1000 dollars by foregoing protection. However, some cars will run up thousands of dollars in repair bills. If you end up with big problems, you will certainly wish you had risked $300 spread out over 3 to 5 years in favor of warranty coverage.
Risk Of Scams
In any industry, scam artists exist. That’s why it’s important to check up on any company that might be offering vehicle protection. CARCHEX, for instance, is an accredited business rated A+ by the BBB.
Other factors that may not enter into cost calculations are benefits that warranties offer such as a rental car while your repairs are completed. Also 24/7 roadside assistance will make sure you are never stranded in the event of a breakdown. Finally, the trip interruption benefit can cover costs due to travel cut short due to a mechanical failure. You can certainly go without coverage for this, but none of these things are free.
Car repair costs are trending upwards. As vehicles become more technologically advanced, the cost to repair goes up. Furthermore, the aftermarket repair industry has adopted a parts-replacement method of repair instead of in-depth diagnostic work. This means that you might end up paying for new parts that aren’t needed, further increasing costs. The best protection against these trends is an extended vehicle protection plan.
Get Repair Cost Coverage
Extended vehicle protection plans are for those who want to make sure their vehicle investment is well cared for. The cost of your vehicle repairs are covered under the protection plan terms, and other benefits offer further savings. In the end, warranty coverage can help you avoid an expensive gamble.