When it comes to car warranties there are definitely some myths that people tell themselves. One of them is that they don’t need an extended auto warranty because it is already covered by a basic warranty. Unfortunately most people don’t realize all of the things that aren’t covered by regular basic car warranties until they are hit with a giant repair bill.   To think that you don’t need an extended auto warranty at all when you purchase a new or used car is a definite misconception.

Yet another myth is that you can wait until something goes wrong to buy an extended car warranty. Although you don’t have to buy an extended warranty the very minute you drive out of the lot with the new or used car, it is not a good idea to wait. That is because your car depreciates the minute you stick the key in the ignition for the first time. The more repairs and problems that appear on your data report with the card the more costly your warrantees and insurance for the vehicle is going to be in the future.  Thankfully once you do buy an extended warranty the rate class you are put in does not change. However if you do wait you could be put in a more expensive rate class than you would have been if you had purchased the insurance promptly in the first place.

Another misconception is that your insurance must be bought at the dealer. Some car dealers will even use the pressure tactic that you must buy the extended warranty now or all other warranties you buy in the future will somehow be inadequate.  It could be a costly mistake to believe this.  Sometimes it costs a lot less to buy an extended warranty from a middleman type company than it does directly from the Chrysler or Ford Company. This is because the dealer selling you the warranty sells it to you at a mark up that is often two to three times higher than what they paid. 

Sometimes these mark ups on what the original warranty is actually worth or could be sold for somewhere else are absurdly high.  Sometimes you can find the same warranty online for half the price.  Keep in mind that a car dealer will mark up a single extended warranty by as much as $3000 and it is legal for them to do this.

Yet another tact used by car dealers to get a new car owner to buy the extended warranty immediately is to tell them that their loan will not be approved unless it I bought.  Some will even tell you that you will not qualify for a loan at all.  The truth is that these warranties are not something that you are forced to buy and it is actually against the law to mislead you in this way. Furthermore you are allowed to shop around and get quotes for warranties and even return a warranty that is not suitable or too expensive as long as no claims have been made on it.