Should You Buy Extended Warranty On A Car? OR ANY Finance Office Products?

Should you buy extended warranty on cars? We explain whether you should buy an extended warranty, gap insurance, rustproofing, or other dealer F&I products when you buy a new car or a used car. We go through all the dealer finance office upsell products that a car dealer might try to sell you, including extended warranty, gap insurance, rust protection, and maintenance plans. Before you buy any dealer products like an extended warranty make sure to watch this video.

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ABOUT ME

With over a decade of experience as a professional car buyer and auto consultant, Shari Prymak has helped thousands of consumers with their car buying needs. Car Help Corner provides honest, objective, consumer advice with all aspects of car buying and car ownership. For more professional advice, check out Car Help Canada, become a member, and subscribe!

[magnoliap]

My Toyota dealer tried to sell me one and of course I said no. My car is 5+ years old now with zero issues.

[tericoulter]

I used to sell cars and I also worked in the back office of a car dealership for a while. Extended warranties are a scam. I would see the same warranty at all different prices (hundreds of dollars of difference for the same warranty). They will get whatever they think they can get away with. If you have done your research on a vehicle and feel it is good value then trust your research. Anything that goes wrong will likely be less expensive than the extended warranty was. The other scam back in the day was undercoating. They wanted to ding you extra for that rust protection. Many folks fell for that but vehicles came from the factory already undercoated. If they put too much pressure on you had better be willing to walk away.

[RamadonPiano]

If you have an expensive german car then I recommend an extended warranty. It is a whole lot cheaper than 5-10k repairs.

[damianpasour]

I think it all depends on what kind of car brand that you are buying like if you were buying a jaguar Land Rover product If you wanna get one you definitely need to have a warranty on those cars

[ronaldcooper]

With Toyota at least, you don't have to buy an extended warranty at the time of sale. You have until the 36, 000 included one is about to expire.

[aalmi]

I’ve always wondered about this myself especially in light of buying two new vehicles within the last couple of years. I personally think that it was great that I got it for the GMC Terrain we bought in 2021 since that car has already presented problems like the battery needing to be replaced last year and the fuel module for the car having to be replaced just a couple of months ago. Granted, those were still covered under the original manufacturer warranty, but still it might be indicative of future problems with the car. With the Toyota Highlander we felt it wasn’t necessary to buy an extended warranty since Toyota has a good reputation for reliability so I don’t think I would get my money’s worth with an extended warranty especially when there’s already a long warranty with it because it’s a hybrid system. However, I didn’t like that within 6 months we had to replace the purge valve, but I hope that was a fluke and it was a minor replacement anyways.

[speederz]

read the FINE line people!!! extended warranty is not bad if u do ur homework...DO NOT pay full the price....and the warranty states that U must have ur oil change at the dealership cause if u dont the warranty will give u a hard time...and of course the dealer wont tell u this....alot of these places dont give a crap about u, all they care is there own pocket...Good Luck

[fremontpathfinder]

I decided to take off the gap insurance and the warranty when I refinanced my Honda HRV shortly after buying it. When I refinanced with my credit union my interest dropped to 2.4% and I took off all warranties. This, combined with the low interest rate dropped two years off the payments. So glad I did that. My 2020 HRV has been very reliable. On top of that, I researched the warranty sold to me and it turns out the company tries to pressure car repair shops to use used parts. I this was a 3rd party plan. In two years I plan to get a Toyota 4 runner and I will get an extended warranty even though it is reliable. I also pay more every month on my car than what is owed.

[sneakeraplus]

Thanks, how about tyre and rim protection plans?

[susanmeredith]

I did buy the Toyota extended warranty. Did negotiate a lower price. I wish Canada could get some of the higher warranty discounts that US seems to be able to get.

[donaldwilson]

When it comes to purchasing vehicles, I first thing I do is do my research to make sure the vehicle I'm considering is a good choice, especially when it comes to reliability, cost of maintenance, and resale value. Second, once I decide, I always make a large down payment so I could keep my monthly payments low and try to pay it off early. I was considering an extended warranty, but because I'm a technician for a Honda dealership, I decided against it because could do my own repairs, and I know what to look for if my 2020 Honda CR-V needs unexpected repairs down the line.

[ctclardy]

What a lot of people don't realize is that these extended warranties are negotiable... sometimes as much as $1000 to $1500.... only buy the manufacturer's extended warranty if you do buy one.

[RizHail]

Honda Dilawri dealerships in Canada first make you sign a contract with Un-refundable deposit of $3000+ before even showing you a full quote. Means if you walk away from the final deal they keep the money. Pathetic dealership experience.

[thomaswyskowski]

"I didn't want the added accessories and I won't pay for it", start walking if you get no compromise, there's another dealer not far away

[romdatt]

Good points regarding the warranty. Having worked in both corporate and dealerships, I can say as a statistical fact that extended warranty owners do indeed win when they keep their cars for beyond the manufacturer warranty - even with the 'reliable' brands. I would add that we always review the inclusions and exclusions. For example, Honda's manufacturer powertrain warranty does not cover turbo chargers, they are only covered in the comprehensive coverage. Same with the water pump. Additionally, wear and tear items like suspension components (esp for heavier users/drivers) are typically covered under the comprehensive. Items like the extended warranty will cover those items throughout the course of your ownership - which have saved thousands for customers.

[ilovetotri]

Great video thanks! I had never heard of gap insurance until my second to last car purchase. It was buying a 2014 Toyota Tundra. I put down $8000. I was shocked that they would think I thought gap insurance made no sense, they are pros at selling that stuff. Anyways, I turned it down. I paid off the loan about 6 months later. I definitely think there is a place for gap insurance. If you are buying a quality vehicle, regardless of mileage, extended warranties are a waste of money.

[wholeNwon]

ALWAYS be willing and comfortable walking out. It's YOUR money. Personally, I only buy high quality (meaning VERY reliable) makes and models from private sellers after a good PPI by my own tech. I would never set foot in a dealership.

[richscott]

You have the new vehicle basic bumper to bumper usually 3 or 5 years and powertrain for 5 years which are auto manufacturer (Mazda, Honda, Toyota, Ford, etc.) warranties. Therefore, you do Not need any Extended Warranty unless you intend or plan to keep the vehicle longer than 5 years. If you plan on keeping the vehicle longer than 5 years let say 7, 8, 9, and 10 years, you should consider purchasing an Extended Warranty providing you drive less than 10, 000 to 12, 000 miles per year. Most auto manufacturers only provide an extended warranty from 7, 8, or 10 years with 125, 000 miles maximum. If you drive 20K to 25K miles per year and the Extended Warranty is good for 8 years with 125K miles, you essentially going to hit the maximum mileage limit in 5 years which means you should Not get an extended warranty as the first 5 years are covered by the auto company warranty and surpassing the max mileage limit your warranty is no longer valid. Next, having a loan, yes do get GAP insurance, it usually less than $200 and it is worth it. You can be the worlds best driver and never have an accident, guess what? not everyone is the worlds best driver and they are aiming to have a collision course with you. Rustproofing is not required for the first 3 to 5 years, however depending on your geographical location living near the Ocean or in the northern states where roads during winter season get Sodium chloride (salt), magnesium chloride, calcium chloride, calcium magnesium acetate and potassium acetate then have your undercarriage checked and clean every 6 months or at least once a year. Have signs of corrosion, then have it rust proof with KROWN, Corrosion Free, or Rust-Check, or Do-It-Yourself with Fluid Film. Never ever go to Ziebart as they are expensive and the worst at corrosion protection. Dealerships are known for talking you into things you do not need. Watch out for 3rd Party Services as the Dealer is not responsible or guarantee anything for services they do not provide themselves. They get commissions for you paying for a 3rd Party service contract. You have to be smarter than those people at the dealership. They will attempt to sell you the world and guarantee you nothing, they just want all your money. Do not sign anything unless you are willing to pay. Read all, do not rush, that is where dealers get you ... blah..blah...blah... Sign HERE! quick and they got you. Buying a new car is great, only do it on your Terms.

[STRIKER]

It depends especially on what they cover for the price. I brought my car in when I had one multiple times with transmission issues. Strange they didn't notice until after the warranty. Besides the noise you would notice during left turns it disengaged. Was a internal leak that came out of my pocket on top of paying for the warranty. So the price of the warranty was around the same as replacement of the transmission. My current vehicle is a 2012 RAV4 that came with warranty in 2015 certified used. They pushed for me to get a extended warranty for 2k and got annoyed when I said no. Mostly because they didn't really make any money off me. It didn't sell originally at a dealership farther away so when they brought it to another I checked it out and got it under 17k. He had the sheet showing how much they paid for different cars on the lot and I got it for a few hundred less. They wanted 21k originally but it sat for a bit and unlike now they want the cars off the lot so they can get more.

[adriannalundasan]

The road hazard protection warranty I purchased for $400 for my 2022 Mazda3 was totally worth it.
Reason I bought the warranty is because of two things, one is the 18inch rims and 45 sidewall of the tires of the car and second, some roads in GTA are in quite poor conditions.
Within 3 weeks of owning the car, I hit a deep pothole at Allen slightly bending the rims and a bubble on the sidewall.
I took it to the dealer and they said they're going to replace the tire and fix the rim. That costs $800 dollars and before Chrismas last year I hit a pothole again causing the same damage but the repair cost that time was much higher and over $1200. I would say that the $400 road hazard protection warranty paid off.