You bought a car. Congratulations! The next step is to throw around words like “Vehicle Protection Plans” That sounds pretty fancy, right? What does it really mean to you, and your wallet?

Let’s first get something straight. It’s not like a magic shield that will protect your vehicle from all harm. It’s like an extended insurance policy, which covers specific repairs after the manufacturer’s guarantee expires. Imagine it more as a safety network than a bulletproof suit.

You may wonder if the extra coverage is really worth it. The cost of a car alone is enough to make it difficult for you to include another item in your budget. Here’s the interesting part.

Imagine that you’re driving on the highway, and suddenly your engine begins making noises like a metal band. If you don’t have an extended warranty, your repair bill could be as expensive as a short vacation. You can get one. You may only need to cover a small fraction of the cost.

But wait! Not all extended warrantys are the same. Some extend warranties are limited to the basics (like problems with the powertrain) while others cover more, from electrical system issues to air conditioning systems. The fine print is important to understand exactly what you are buying.

Let’s get down to dollars and cents. It may be expensive to purchase extended warranties, but you should consider it an investment. Imagine not being concerned every time you hear a strange sound or notice a warning on your dashboard.

The flip side is: what if you don’t ever need to make those costly repairs? In this case, you would have essentially paid money for something you never used.

When it comes to dealing with warranty providers, you can feel stuck in traffic. When you call customer service, are you put on hold as long as it takes to binge-watch a whole season of your favourite show? It’s almost like that.

Secondly, some dealerships have their own version of an extended warranty while third party companies offer alternative options. There are pros and con to each. For example, dealership plans could be easier to handle but more expensive. Third-party warranties might be cheaper but have their own hassles.

Here’s a few real-life stories.

Joe’s transmission went kaput two month after his warranty had expired. Luckily, he’d purchased an extension plan and was able to get the job done for less than $3,000 if he hadn’t.

I’m not sure if my cousin Lisa has ever used the extended warranty she purchased for her SUV when she bought it five years ago. But, even though Lisa never used it, Lisa is still driving around without major issues.

What is the moral? Depending on your circumstances, extended auto warranties could be both lifesavers or money pits.

Make sure you have done your homework first before making any final decisions.

1) Compare different plans.

2) Check for reviews

Ask questions until your face is blue.

Costs and benefits should be weighed.

Most importantly, trust your gut feeling!

Finally (wait…no, there are no conclusions!) The decision to buy additional insurance is based on personal preference, risk tolerance, and financial considerations.

Have fun driving!