Are Extended Warranties on Used Cars a Good Investment? What You Should Know

The decision to get Used Car Warranties is an important one. An extended warranty also called a service contract or maintenance plan, can protect you from unexpected costs and give you peace of mind. However, some used car dealerships offer these warranties as part of their sales pitch. Before you sign up for this type of coverage, it’s important to understand what it covers and what it doesn’t cover—and whether buying it is actually worth the cost.

What is an extended warranty, and what does it cover?

An extended warranty is a protection plan that covers the repair or replacement of a product or service. These warranties can be purchased for new or used cars and even home appliances. Used car dealerships often offer extended warranties when they sell you a used car, but there are also options to purchase them privately if you have decided to buy your own vehicle instead.

Warranties may only last one year, three years, five years or up to ten years, depending on what type of warranty you choose. The longer the warranty period lasts, the more expensive it will be for you to purchase it (of course).

Used Car Warranties

Things to consider before purchasing an extended warranty

Warranty Limitations

The coverage provided by an extended warranty depends on the specific plan you purchase, but typically the warranty will cover parts that become defective and need to be replaced due to normal wear and tear as well as parts that are damaged during an accident. A few things you should know:

  • Warranties do not cover rust damage or corrosion to a vehicle’s body, including dings, dents and scratches.
  • Warranties do not typically cover maintenance or routine oil changes (although some may). This means if something breaks down while it’s still under warranty, you may have to pay for repairs out-of-pocket until your car is fixed by the dealership or mechanic.

Coverage Options

The dealers selling used cars in Kerala may present you with various options that differ in periodicity, vehicle coverage area, and so on. The most common types of coverage are:

  • Parts and labour to fix or replace an item that breaks
  • Replacement or repair of a vehicle if it is stolen, totalled, or damaged in a collision
  • Car rental reimbursement if your car is disabled and you need transportation while yours is being fixed (the amount varies)

When buying an extended warranty on a used car, there are some things you should know. You should understand what’s covered and not covered, how long coverage lasts, what the deductible amount is and what maximum payout limits are.

Servicing Options

Most extended warranty policies will cover the cost of parts and labour on major components, like the engine or transmission. To find out what’s included in your warranty, it may be a good idea to ask your dealer if you can see the language of their policy before purchasing it.


The cost of buying an extended warranty depends on a variety of factors, including the type of warranty you select and the make and model of your car. In general, longer warranties (3-year coverage) are more expensive than shorter ones (1-year coverage). Additionally, newer cars are typically more expensive than used ones. All told, it’s best to do some research before getting Used Car Warranties.


If you want to protect your investment, an extended warranty may be a good choice. In our opinion, it’s not worth the extra money if you can afford to cover the cost of repairs on your own. However, if you can’t afford those costs or don’t want to put them on yourself, then this is probably going to be a good option for you. We recommend finding out all of the details before signing up for one though, so that there are no surprises later on down the road!

Written by Orange Blog

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