As vehicles age, they become more susceptible to wear and tear, which in turn can lead to mechanical breakdown and failure. Once your car is past its manufacturer warranty, the cost of repairs can be a detriment to your finances, which is why it may be in your best interest to opt for an extended warranty. Extended warranties are available for most vehicles, but they are not always necessary for some.
In this guide, we will explore whether extended warranty policies are worth it for new and used cars, as well as electric vehicles. We will also unpack the various benefits of an extended warranty, and how you can start building your warranty quote with ALA today.
Click on a link to jump to that section:
- Is Extended Warranty Worth it for Used Cars?
- Is Extended Warranty Worth it for New Cars?
- Is extended warranty worth it for electric vehicles (EVs)?
- What are the benefits of extended warranty policies?
Is Extended Warranty Worth it for Used Cars?
Extended car warranties are highly recommended for used cars, as after so many years, their manufacturer warranty will have expired. Most vehicle manufacturers offer a three-year warranty; some offer their own extended warranties, ranging from five to seven years. Once this runs out, you can still opt for further warranty; at ALA, our policies range from one to three years.
There are various advantages to choosing an extended warranty policy for your car, including:
Peace of mind
Financial security
Convenience
Increased resale value
However, there may be some disadvantages that can be identified with extended warranties, such as the upfront cost. However, at ALA, if you cannot pay for your extended warranty upfront, you can opt to pay in monthly instalments. If you suffer an electrical or mechanical breakdown in your used car, an extended warranty can save you on time and money in the long run.
At ALA, we have three levels of extended warranty cover: silver, gold and platinum. The best policy for you all depends on your needs and preferences.
You can find out more about extended warranties for used cars in our previous guide here.
Is Extended Warranty Worth it for New Cars?
If your car is brand new, it may not be worth opting for an extended warranty, as the manufacturer warranty will still likely be in place. Extended warranties are designed to follow on from manufacturer warranties. If your car is relatively new and the manufacturer warranty has run out, it could be worth considering an extended car warranty.
Like used car warranties, there are various advantages to choosing an extended warranty for your new car, including cost savings, peace of mind and enhanced resale value. However, there are some disadvantages, such as limited coverage and the fact that there isn’t a need for an extended warranty on a brand-new car.
There are a few elements that extended warranties possess that manufacturer warranties do not; for instance, manufacturer warranties are non-renewable, and extended warranties often include coverage such as wear and tear and roadside assistance.
To find out more about extended warranties for new cars, and whether they are worth it, please read our previous guide here.
Is extended warranty worth it for electric vehicles (EVs)?
With more and more people opting for an electric or hybrid vehicle, there comes an increasing need for extended warranties as the electrical components suffer from wear and tear over time. EV extended warranties are specifically tailored to the vehicle’s components, including electric car batteries and engines for hybrid vehicles.
Extended warranties for electric vehicles are highly recommended, especially because of their complex components that can be expensive to repair. An extended warranty will also increase the car’s resale value. There are various components that are covered in an extended warranty, such as the EV system, electrical components, brakes, suspension and steering, and the engine (if the car is a hybrid).
However, drivers should make some key considerations before choosing an extended warranty policy for their electric vehicle. These include coverage limits, transferability, and provider reputation. At ALA, we have a 92% five-star rating on Trustpilot out of almost 17,000 reviews (Feb 2024), so you know you’re in safe hands.
How much your warranty policy will cost you depends on the age of your vehicle, its mileage, and the level of coverage you choose. You can start building your EV warranty quote here.
You can find out more about the benefits of EV extended warranty policies here.
What are the benefits of extended warranty policies?
As previously mentioned, there are plenty of benefits to choosing an extended warranty policy for your vehicle. Most importantly, you won’t have to worry about your car unexpectedly breaking down, and having to pay the expensive costs that come with it. An extended warranty policy will cover you against any mechanical or electrical faults, so you also have the added financial security.
An extended warranty policy can also protect you against inflation, as parts and labour costs tend to increase over time. If you choose to sell your vehicle before your warranty expires, it could also increase the vehicle’s resale value, as cars with an extended warranty in place tend to be more attractive to buyers. Although some may worry about the overall cost of an extended warranty policy, our policies at ALA can be paid for in monthly instalments, with a choice of three coverage options to suit your needs.
Before choosing an extended warranty for your car, consider your vehicle’s reliability, driving habits, budget and the terms of the warranty. By acknowledging these points, you can choose the best policy for you.
