Few industries have undergone as much change as the auto industry since the dawn of the 21st century. An increased emphasis on environmentally-conscious behavior has led auto manufacturers to continually develop hybrid vehicles, while escalating fuel costs forced the auto industry to focus attention on producing more fuel-efficient vehicles.

Another notable shift among auto manufacturers over the last decade is the increasing attention and emphasis placed on preowned vehicles. While there was once a time when preowned vehicles were left to used car dealerships, nowadays many auto manufacturers, including luxury lines such as Lexus and BMW, market their preowned vehicles. Couple that with the recent recession that has left many looking to get more bang for their automobile buck, and the market for preowned vehicles has likely never been better.

One concern many prospective auto buyers routinely have with respect to preowned vehicles is the strength of their warranty, assuming the vehicle comes with a warranty at all. Oftentimes, a preowned extended warranty is a wise investment, especially in an economic environment where everyone is hoping to make the most of each dollar spent. Before purchasing an preowned vehicle extended warranty, it can help to take the following into consideration.

Is it necessary?

While a warranty might seem like one of those things that’s always worth it, that’s not necessarily true. Vehicle models with a proven track record for reliability might not require the purchase of an extended warranty. Keep in mind not all repairs are covered by a warranty, so for models that tend to keep going strong with just a minor repair here or there, an extended warranty might be an unnecessary expense.

Prospective auto buyers should keep in mind, however, that there is a flip side to this coin as well. For example, auto recalls might not be common, but they’re certainly not rare, either. Buyers considering a model with a history of recalls should hedge their bets and purchase an extended warranty.

Where can the vehicle be taken?

Many times, the terms of an extended warranty will dictate where a vehicle owner can take the car for repairs. These terms are strict and might eliminate the local mechanic a vehicle owner trusts and has a history with from consideration. Oftentimes, a manufacturer extended warranty will require the warranty holder bring the vehicle back to the shop where the warranty and vehicle was purchased. This is generally not so with aftermarket warranties, but buyers should read the fine print before deciding on a warranty for their newly purchased preowned vehicle.

Do you know the company selling the warranty?

Extended warranties require as much research before purchasing as the vehicle itself. Much like an educated consumer wants a vehicle history report before purchasing a car, that same consumer should also research their warranty company. In the case of manufacturer warranties, this really isn’t an issue, as most auto manufacturers are financially stable enough to trust.

Where research into a warranty company truly comes into play is when a prospective buyer is considering an aftermarket company, or a company that acts independently and does not manufacture vehicles. As the economic downturn of 2008 and 2009 proved, not all financial institutions are as stable as they might seem, so it’s best to practice due diligence and extensively research an aftermarket company before signing on the dotted line.

Copy the Story Link