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To what extent is your vehicle already under warranty, and is this coverage in sync with how long you anticipate owning it? If the car you've just bought is new, take a close look at its factory warranty before making an extended warranty decision. If, for example, the vehicle has a factory warranty of three years or 36,000 miles, and you plan on keeping it for two or three years -- with an anticipated annual mileage of about 10,000 -- then an extended warranty makes little sense, since you'll likely be covered under the manufacturer's plan. However, if you plan on keeping the car long after the factory warranty expires, an extended auto warranty is worth considering. If the car you've just purchased is used, you'll need to ascertain if there is warranty coverage from the dealership (coverage periods may range from as little as a month to up to a year, or more). If you're buying a late-model used vehicle, it's possible that the vehicle's original factory warranty is still in effect (this will be dependent on how many miles the car has under its tires, and on how much time has passed since it was originally titled). Some manufacturers also offer "certified used" programs that extend original factory warranty terms on pre-owned vehicles. If the car isn't under warranty, or if you plan on keeping it past its warranty's expiration, an extended warranty makes sense.
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Some dealers do mark up their prices over the suggested retail of an extended warranty plan. Just like additional dealer markup (ADM) on vehicles, the difference is that ADM is posted on the vehicle. You never know when the dealer is giving you suggested retail or their own higher price for a warranty. It's best to ask them straight out, then double check prices with another dealer. Why not try to negotiate a better price on the extended warranty, just like you did on the vehicle? After all, you are an Edmunds.com reader.
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