Buying an extended service contract: Is it worth it?

First, let’s talk about the facts. Most new cars come with a manufacturer’s warranty and a powertrain warranty. Here’s some basics:

General warranty (a.k.a. bumper-to-bumper): This is a basic warranty that covers repairs and parts and labor, to correct any problems in material or workmanship. Basically, if it is a manufacturer defect (mis-designed, mis-built, mis-installed) this warranty will fix it. However, any wear and tear issue is not covered under this type … if you break it, you pay for it.

Powertrain warranty: This warranty simply covers the powertrain of the vehicle; the engine, transmission, transaxle, transfer case and drive systems.

Currently, our manufacturers are offering the following general and powertrain warranties on new vehicles:

Chevrolet offers a 3-Year/36-K Mile Bumper-to-Bumper New Vehicle Limited warranty and 5-Year/100-K Mile Powertrain Limited warranty.

Hyundai has a 5-Year/60-K Mile New Vehicle Limited warranty and 10-Year/100-K Mile Powertrain Limited warranty.

Nissan offers a 3-Year/36-K Mile Limited Vehicle coverage and 5-Year/60-K Mile Limited Powertrain coverage.

Extended Service Contracts: Contracts will vary between make, model, and year of vehicle; as do costs. Virtually every mechanical, electrical and electronic component of your vehicle is covered against failure by this type of warranty even if it results from wear and tear.

These contracts are so important!  You no longer have to worry about “how it broke” but more about “when will it be fixed.” It’s important to listen to the Finance Manager when discussing your options. They do not want to see you a year down the road paying a $2000 service bill. Unfortunately, vehicles will break, they are man-made. Wouldn’t you like the peace of mind, knowing you didn’t have to worry about that?

Has an extended service contact ever saved you from an expensive repair?