Buying a new car involves a lot of money. Obviously, the focus is on the brand and the financials involved in purchasing. How much you have to pay, how to arrange for finances, which are the best options for getting cheap money, what are the monthly payments and similar arithmetic fills your mind. But there is another element that accompanies buying a new car.

Assuming that the car is under the manufacturer’s warranty, which is quite normal, not much attention is paid to it. But dealerships also offer car warranty maintenance insurance which is extended warranty that comes into effect once the manufacturer’s warranty ceases to exist. Buying extended warranty at the time of buying the car can save you money as the more you delay in buying it the cost goes up.

The more you are covered by warranty the more peace you get in using the car. This is the concept behind buying extended car warranty that can be beneficial for car owners in saving cost and enjoying a smooth ride. But there are some important considerations that can help you buy the right car warranty insurance so that you enjoy adequate coverage for repairs and other services at a reasonable cost.

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Scrutinise the validity of the manufacturer’s warranty

Manufacturers offer varying degrees of warranty for new cars. The period of warranty is counted from the “in service” date, which is the date when the vehicle is considered to handed over to the customer. A dealer uses some vehicles for test drive and demonstration that are all stamped as “in service” although displayed in the showroom. These vehicles are likely to have covered several miles but yet stay new and also sold as new. If you happen to buy such a vehicle, check the “in service” date and the miles travelled to ascertain the residual life of the warranty because if the vehicle has been “in service” for a year, you are losing that benefit and would require an extended warranty to make up for the lost time.

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How long you retain the car

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Some people have the habit of changing cars frequently. If you belong to this category then think carefully about taking an extended warranty. Do a simple arithmetic taking the figures of the number of years you want to hold on to the vehicle, the annual miles to be driven, and the warranty period. If the warranty is for 3 years or 30,000 miles and you keep the vehicle as long as the warranty exists then there is simply no need of extended warranty.

Reliability of the car model

Every model of car has history of its reliability that indicates the failure rate that can be used to work out an approximate cost of repairs involved in maintaining the car. Although this is not a very reliable way to ascertain if you need extended warranty or not, at least the ball park figures help you to know the amount that should be spent for the warranty.