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Should I Buy Extended Warranty from a Dealership?

14 May 2024

Written by Simon England

|  5 Minutes

If you recently bought, financed or leased a car from a car dealer, you may have been offered an optional extended warranty policy, or used car warranty, if the manufacturer warranty has run out. Buying your extended car warranty from a dealership might seem like the more straightforward, practical option, but is it the best choice for you?

In this guide, we will compare extended warranty policies from a dealership and a third-party warranty provider such as ALA, as well as the benefits and downsides to dealership used car warranties. We will also explore what is covered in an extended car warranty from a dealership, and how our warranty coverage can help you.

Is it worth getting an extended warranty from a dealership?

Extended warranties from dealerships offer convenience and peace of mind by covering unexpected repair costs after the manufacturer’s warranty expires. However, whether it’s worth it depends on various factors such as the reliability of your vehicle, your driving habits, and how long you plan to keep the car. Dealership warranties often come with higher upfront costs, but they may provide longer coverage periods and may be included in your car financing.

When deciding if an extended warranty from a dealership is worth it, consider the following:

  • Reliability of Your Vehicle: If you own a vehicle known for frequent breakdowns or costly repairs, an extended warranty could save you money in the long run.

  • Driving Habits: If you drive frequently or in harsh conditions, you may be more likely to encounter issues that require repair, making an extended warranty a wise investment.

  • Length of Ownership: If you plan to keep your vehicle for many years, an extended warranty can provide peace of mind knowing you’re protected against unexpected repair costs.

To see how our policies compare with those from dealerships, you can start building your extended warranty quote here.

2 people in a car dealership

What are the downsides of purchasing an extended warranty from a dealership?

One downside of dealership warranties is their potentially high cost compared to third-party warranties. Additionally, they may come with limitations on where you can get repairs done, and they may have strict requirements for maintenance records. Some warranties also have deductibles for each repair visit, adding to the overall expense.

When considering the downsides of dealership warranties, keep the following points in mind:

  • Higher Upfront Cost: Dealership warranties often come with a higher initial price tag compared to third-party warranties.

  • Repair Restrictions: A car dealership warranty may limit where you can get repairs done, potentially inconveniencing you if you’re far from the dealership.

  • Deductibles: Many dealership warranties require deductibles for each repair visit, increasing the out-of-pocket expenses.

At ALA, our extended car warranty policies come in three coverage options; Silver, Gold and Platinum. Our flexible warranty coverage options allow you to choose the policy that suits your preferences and budget, some of which aren’t offered at dealerships.

What is covered under a dealership extended warranty?

A car dealer warranty typically cover major components like the engine, transmission, and electrical systems. However, it’s essential to read the fine print to understand exclusions and limitations. Some warranties may not cover wear-and-tear items or certain electronic components, so it’s crucial to know what you’re getting.

Before purchasing a dealership extended warranty, review the coverage details, including:

  • Major Components: Ensure that critical parts of your vehicle, such as the engine and transmission, are covered.

  • Exclusions: Be aware of any items or conditions that are not covered by the warranty, such as wear-and-tear items.

  • Limitations: Understand any limitations on coverage, such as mileage or time restrictions.

Our Platinum coverage option at ALA covers items such as wear and tear and infotainment systems, as well as standard elements such as the clutch, brakes and engine.

2 people in a car

What is the difference between a dealership warranty and a third-party warranty?

When comparing dealership warranties to those provided by third-party companies like ALA, several factors come into play:

  • Cost: Third-party warranties often come at a lower upfront cost because they don’t have the overhead of dealership operations.

  • Length: While dealership warranties may offer longer coverage periods, third-party warranties can also provide extended coverage options that match or exceed dealership offerings. Our extended warranty policies at ALA can be renewed at the end of your contract if you wish.

  • Benefits: Third-party warranties may offer more flexibility and benefits. Our variety of coverage options offer different benefits, such as car hire and continental use on all of our policies.

  • Add-ons: Both dealership and third-party warranties may offer additional coverage options for items like roadside assistance contributions, recovery and hotel accommodation and rail fare (these are all provided on our extended warranty coverage options).

Extended warranty policies with ALA

At ALA, we provide extended warranty policies designed to offer comprehensive warranty cover and peace of mind when encountering expensive repair costs. Our policies are transparent, with no hidden fees or surprises. We offer flexible warranty cover options to suit your needs, whether you’re looking for basic protection or more extensive coverage for high-tech components.

Our warranties come with benefits like roadside assistance contributions, rental car reimbursement, and coverage for wear-and-tear items. We also provide coverage plans for various vehicles, such as cars, electric vehicles and vans. With ALA, you can drive with confidence, knowing that you’re covered by one of the most trusted names in the industry.

To find out more, you can get in touch with a member of our team today.