We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence. Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
How We Make Money.
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for .
Editorial Integrity
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.
How We Make Money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.
After weeks of shopping for a car and bargaining with several dealers, here is a good car for a good price. The ordeal is over. It’s time to sign the papers and drive away.
But then the dealer suggests a service contract or an extended warranty, six years or 100,000 miles. That sounds like a good idea, and it may be. But, first, consumer advocates say, consider these points:
Car dealers make a profit on the extended warranty, sometimes as much as they make on the car! Buyers can negotiate the price of the warranty just as they did the car. The working assumption is that dealers pay about 50 percent less than the asking price for the warranty. A buyer should not pay more than two-thirds of the asking price.
It is not necessary to buy the extended warranty right away. Buyers usually have 12 months after a new car purchase to buy a warranty. Get the time limit from the company selling it.
The warranty need not be purchased from the dealer. Check a credit union or auto insurance dealer for a warranty program, sometimes known as mechanical breakdown insurance. Check out the service contract or car warranty companies.
Shop around for the best price and the best coverage. If the warranty has a $100 deductible for each service or repair, why bother?
Buyers can even shop different dealerships by calling the finance managers at the other stores. A buyer can tell the dealer who sold the car that he’s going to check with the competition to find the best price.
Don’t buy a double warranty, which is coverage for items already covered by the manufacturer’s warranty.
If the car won’t be in the driveway for longer than the manufacturer’s warranty, typically three years or 36,000 miles, why bother? Beware of the sales pitch that the service contract will help the resale value of the car. A buyer has just paid three years for a service that might never be used.
If buying the warranty from the dealer, make sure it’s the car manufacturer’s warranty, which is to say a Toyota warranty for a Camry, a Ford warranty for a Taurus.
The warranty begins the day it is purchased, not on the date the car is purchased. So those who buy it 11-and-a-half months after purchasing have a car covered for seven years instead of six.
A used car’s price sticker should clearly state whether there is any initial dealer warranty. As for an extended warranty, many companies won’t sell one unless the used car was bought from a dealer.
Never buy an extended warranty when leasing a car.
Share