New Car Extended Warranties Do I Need One?

Greenham Motors
I have seen this happen a lot, people will sit for a few hours with a car sales person negotiating on the price they will pay for their new car, yet when it comes to protecting their investment and getting new car extended warranties, they decline. I don’t quite understand the reasoning behind this, your car is the second biggest investment we make (our home being the biggest) wouldn’t you want to protect it?

One of the main reasons I hear for opting not to get extended automobile warranties is “I thought this vehicle was suppose to be a quality vehicle?” You are quite right, the vehicles on in the market today are good quality, however, consider this for a second …

Your new car has over 17,000 moving parts. If it were built 99% “perfect”, that means still 170 parts would fail during the life span of your new car. Going further if it were built 99.9% “perfect” that means 17 parts would fail during the life span of your car, and going one more step if it were built 99.99% “perfect” then 1.7 parts would fail during the lies.

That one or two parts could be something as inexpensive as a seal for $15 or an engine for $4000+. The question you need to ask yourself is … If it was a major part that went would you be able to just pop out the cash to pay for it? The more important question is doesn’t it make sense to spend money on new car extended warranties now so you can keep that $4000 where it belongs … in your pocket?

Think of extended automobile warranties as mechanical insurance for your car. It lets you expand the current manufacturer’s warranty and it covers the cost of new “manufacturer” replacement parts, plus a techs labour.

There are different types of new car extended warranties which give you a wide range of mechanical coverage based on various terms and kilometre allowances. The key is having an idea as to what you plan on doing with your new car. Are you leasing? In which case all you may need is a top up of the comprehensive warranty (bumper to bumper). If you buy your car and hang onto it for a while then you may want coverage for a longer period of time both on the comprehensive and on the powertrain. Incidentally, if you are keeping you car for a long time, there are a couple of advantages to having extended automobile warranties.

1. New car extended warranties are fully transferable to a second owner. That provides peace of mind for the new buyer AND typically those vehicles with extended automobile warranties show pride of ownership, and

2. They increase your re-sale value

The cost of repairs have increase a lot over the years. For example, in 1991 a transmission replacement would bring you an $850 repair bill, in 2003 the average repair bill was $4056 and I am very confident in saying that those rates have increased even more since then. Adding new car extended warranties to your monthly payment protects you from the rising costs.

Oh and one last point … Do you know the NUMBER 1 REASON people’s vacations are cut short?


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  • There are certainly a lot of details like that to take into consideration. That?s a great point to bring up. I offer the thoughts above as general inspiration but clearly there are questions like the one you bring up where the most important thing will be

  • Thank you for the sensible critique. Me & my neighbour were preparing to do some research about that. We got a good book on that matter from our local library and most books where not as influensive as your information. I am very glad to see such information which I was searching for a long time.

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