Is an Extended Warranty Worth the Price?
A Consumer Reports survey found that although dealers love to sell extended warranties, the payout probably isn’t worth the cost. According to the report, consumers paid out an average of $1,000 and saved only $700 in repairs.
As vehicles have become more reliable, the likelihood that they will need extensive repairs has decreased. Therefore, buying an extended warranty is buying insurance for a something that will probably never occur. This is how insurance companies make money.
On the other hand, there are probably plenty of car buyers out there who’ve saved a lot of money by an extended warranty. At the same time, there are other options for emergency automotive repairs. One is to take the money you would have spent purchasing an extended warranty and putting it into a savings account for that unforeseen emergency.