Is it worth it to extend your motor warrantee?
A motor warrantee is an insurance product, underwritten by an insurance provider, which is developed to protect your car against mechanical or electrical failure after the manufacturer’s warranty has expired.
A motor warrantee is the best deal a car owner should subscribe. It helps you to take care of risks and uncertainties that you may encounter on your car. After buying your car, be it cash or any form of dealership, you may be approached by the finance manager at the dealer, with an offer of a compelling pitch for an extended warranty.
A survey conducted by the Consumer Reports National Research Center in late 2013 found that 55 percent of owners who purchased an extended warranty hadn’t used it for repairs during the lifetime of the policy. And, on average, those who did use it spent hundreds more for the coverage than they saved in repair costs.
The last-ditch effort to sell you a warranty, or a range of other unnecessary services, is the dealership’s final assault on your check book before you tuck it securely away and drive off. Sure, the pitch is convincing: Should an expensive repair be necessary after the factory warranty ends, you’d be protected. No one wants a big, financial surprise, nor wishes to be stranded roadside.
Among survey participants who used their policy, the median out-of-pocket savings on repairs covered by extended warranties for all brands was $837. Based on a $1,214 average initial cost, that works out to a net loss of more than $375. Factoring those who didn’t use their policy, the median savings was zero. And that may have something to do with why satisfaction with automobile extended warranties is among the lower rated of all products and services surveyed by Consumer Reports, and why only about a quarter of respondents said they would definitely get it again.