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Pros and Cons of Purchasing Extended Warranty Products From Providers

Of the three organizations that provide extended warranty products: the new or used car dealership, the manufacturer and the third party or independent company. There are pros and cons to each. We take a look at these pros and cons in brief, so that you have an idea where you would like to make you extended warranty purchase.

Manufacturer backed extended warranty.

Pros – There is a dealer repair network that stretches nationwide and there will be no haggling regarding price, repair or components.

Cons – The extended warranty has a high up front cost and the dealer network might be limited to the area of your residence.

New or used car dealership

Pros – Low cost up front

Cons – How reliable is the product? You purchase the plan at the dealer and can only have the vehicle serviced at one service point. If you live in LA and are vacationing somewhere else, how do you get the vehicle repaired?

Third party or independent company

Pros –  Low cost, generally the lowest of all at 30 – 50% less than the cost of a manufacturer extended warranty. Many choices in terms of coverage, providing extended warranties is generally the only business they deal in.

Cons – Careful research into the background of the company needs to be conducted as many are “here today, gone tomorrow”. Careful research also needs to be undertaken on the kind of components covered by the extended warranty plan.

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