Does it make sense to buy extended car warranty?
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My husband and I are going to buy a Ford Mondeo. Are car warranties a scam or should we budget on buying it?
abbielee
1 year ago
Expert Financial Adviser Answer
Darren Smith
answered 1 year ago
some warranties are worth their weight in gold.
the manufacturer's one is usually the best you can get as they will know precisely what can go wrong on the vehicle and they will have the expertise to help you.
you need to consider where the car will be serviced - main dealer or independent garage - why? well the ford warranty might insist on ford doing all the servicing and using only ford branded or approved parts and accessories - local garages might be tempted to cut corners (not always) and you wouldnt want to void a warranty by inadvertently trying to save money on the maintenance.
there are companies that specialise in warranties but you must be careful when getting quotes for cover as again they will offer different premiums based on dealer repairs (more expensive) to any garage (cheaper) but is any garage always cheaper? they might charge £100ph but if it takes them 5 hours to fix the problem compared to £150ph with ford that might only take 2 hours - did you save anything after all? (above figures are purely for example as i drive a VW!)
if you take a warranty you will have a cooling off period once you receive your paperwork so that you can check that you are covered for exactly what your car has, ie turbos, 4x4, built in sat nav, etc all these crucial things can impact on cost.
it would also be worth finding an online owners forum for your car and seeing what they do - they will be more impartial than the dealer or warranty people and will tell you about issues known for your model and year - this could mean walking away from a lemon before parting with your hard earned.
after all this, i personally do have a warranty as the cost of certain replacement parts, diagnostics etc would make it unviable to keep my car on the road compared to paying for a warranty. but do check that the plan you choose is underwritten by a reputable and FSA approved insurance company, Axa are prominent in this field.
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the manufacturer's one is usually the best you can get as they will know precisely what can go wrong on the vehicle and they will have the expertise to help you.
you need to consider where the car will be serviced - main dealer or independent garage - why? well the ford warranty might insist on ford doing all the servicing and using only ford branded or approved parts and accessories - local garages might be tempted to cut corners (not always) and you wouldnt want to void a warranty by inadvertently trying to save money on the maintenance.
there are companies that specialise in warranties but you must be careful when getting quotes for cover as again they will offer different premiums based on dealer repairs (more expensive) to any garage (cheaper) but is any garage always cheaper? they might charge £100ph but if it takes them 5 hours to fix the problem compared to £150ph with ford that might only take 2 hours - did you save anything after all? (above figures are purely for example as i drive a VW!)
if you take a warranty you will have a cooling off period once you receive your paperwork so that you can check that you are covered for exactly what your car has, ie turbos, 4x4, built in sat nav, etc all these crucial things can impact on cost.
it would also be worth finding an online owners forum for your car and seeing what they do - they will be more impartial than the dealer or warranty people and will tell you about issues known for your model and year - this could mean walking away from a lemon before parting with your hard earned.
after all this, i personally do have a warranty as the cost of certain replacement parts, diagnostics etc would make it unviable to keep my car on the road compared to paying for a warranty. but do check that the plan you choose is underwritten by a reputable and FSA approved insurance company, Axa are prominent in this field.
