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Things to consider before buying an extended warranty

Bumper-to-bumper factory warranties can protect motorists should their vehicles experience any problems in the initial years after the car was purchased. Such warranties typically expire after three years or roughly 36,000 miles, whichever comes first. Once that warranty has expired, vehicle owners must then finance the cost of any problems that arise on their own.

But many drivers purchase extended warranties to provide further protection once their bumper-to-bumper manufacturer warranties have expired. Much like the initial warranty, an extended warranty can help drivers withstand the costs of repairs, and many drivers purchase such warranties before they even drive their new car off the lot, as the cost of an extended warranty purchased after the initial warranty has expired is typically a lot more than it would have been had it been purchased at the same time as the vehicle. But while an extended warranty is, in theory, a great idea, such extra protection is not necessarily for everyone, and there are some things car buyers should consider before buying an extended warranty.

• Length of ownership: If you are a driver who typically buys a new car every few years or once the odometer hits the 40,000 mile marker, then an extended warranty likely is not worth the investment. Unless you plan to put lots of miles on the car during the three years you intend to own it, then you won't need the extended warranty because you are less likely to own it by the time that warranty goes into effect. In addition, since many manufacturer warranties are in effect until the car exceeds 36,000 miles, it's probably worth the risk to avoid buying the extended warranty just so you're covered for the few thousand miles the car will no longer be under the manufacturer warranty.

• Backer: Who is backing the extended warranty is another factor car buyers must consider before adding the extra protection. A manufacturer-backed extended warranty is typically your safest bet, as you can take the vehicle into any of that manufacturer's dealerships across the country and have your warranty honored. A third-party warranty may insist the vehicle is taken into the dealership where you purchased the car, a big negative for anyone who might be moving while they own the vehicle and an ever bigger cause for concern if you are not a fan of the maintenance staff where you purchased the vehicle.

• Coverage: All extended warranties are not the same, and it's important that you understand the differences between your options before purchasing a warranty. Many extended warranties are tiered, which means some will offer you the moon while less expensive options are far more limited in terms of what they do and do not cover. Carefully read the fine print of each extended warranty offered to you to be certain you are getting what you want for the price you want to pay.

• Cost: When buying a car, you don't need to buy an extended warranty from the same person who sold you the car. In fact, dealerships may compete for your extended warranty business. Ask the finance manager where you are buying the vehicle to quote you a price on their extended warranty offerings, and then take that price to the dealer's competitors until you find a better deal. You may or may not find a better deal, and if you do you can always take that deal back to the dealer who sold you the car and ask that dealership to match the price. If they won't, simply take the best offer you found from another dealer.

• Personal history: Your personal history also can provide valuable insight into whether or not an extended warranty is right for you. If you are a driver who strictly adheres to manufacturer maintenance schedules and drives defensively, then you may not need an extended warranty since your car likely won't be in need of significant repairs. But if vehicle maintenance is not high on your priority list or if you live in a place where traffic is often congested and your risk of accident is greater, then an extended warranty is likely a wise investment.

Extended warranties can provide peace of mind to motorists worried about the potentially costly expense of automotive repairs. But such extra protection is not always in a driver's best interests.