An aftermarket car warranty is an extended service contract offered by a third-party provider that covers the costs of Auto Repairs or replacements for specific car components beyond the manufacturer's warranty period. While having an aftermarket car warranty can be beneficial in some ways, there are also potential drawbacks you should consider before making your purchase.
Pros:
- An aftermarket car warranty can provide additional coverage for essential parts and components which may not be covered under the manufacturer’s warranty. This can be especially helpful if you plan to keep your car for an extended period of time, as most original warranties only cover a limited number of years or miles.
- Aftermarket warranties also allow you to budget for repairs and replacements, as they generally have fixed costs (including taxes and fees). This can make it easier to plan ahead and save money in the long run.
Cons:
- Aftermarket car warranties may not provide Full coverage for all parts of your vehicle. It’s important to read the fine print of the contract before signing to make sure that it covers all the components you need. Typically they don't cover wear and tear parts like Brake Repairs. So they may only cover half the price of the part and the customer would have to pay for the difference.
- In some cases, aftermarket car warranties may require additional fees for parts or labor that are not covered by the original manufacturer's warranty. This can add up over time and increase your overall costs. They are in the business to make a profit too.
-Most Aftermarket Warranties don't pay for the full labor cost of the shop so the customer will have to pay the difference. So if a shop's labor rate is $139 the Aftermarket Warranty might only pay $90 an hour. They generally won't pay for the required amount of time. So if you are in a rust area and it calls for 2 hours of labor the Aftermarket warranty might only pay for 1 hour or less. The customer would have to pay the difference.
- Finally, third-party car warranty companies may not have the same level of customer service or responsiveness as the original manufacturer. This can make it difficult to get timely repairs and replacements, which could result in costly delays.
It is important to weigh all of these pros and cons before deciding whether or not an aftermarket car warranty is right for you. Depending on the cost of the aftermarket warranty it may be a better option to put aside $100 -$200 a month in a Savings account or Money Market. The interest you can make and not being told no to certain repairs.
This may not be all aftermarket warranties but this is what we have experienced with several of them. Not all of them are the same and some are better than others.
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