When it makes sense to buy an extended car warranty

Do you need to wear a belt and suspenders? Probably not, but some folks undertaking major purchases think they need extra protection.

The same goes for cars. People buy extended car warranties, just in case.

However, a Consumer Reports survey found that 55 percent of those who bought extended warranties never used them for repairs during the life of the policy and they have typically paid $1,200 for this coverage. That's why many financial advisers don’t recommend buying them.

People usually keep a new car for six years, a time span during which a vehicle tends to have fewer issues, reducing the need for warranty service, points out Marshall Armond, CEO of CreditRevo.com. “Check the manufacturer’s warranty, see what it covers and for how long," Armond says. "Some offer seven-year/70,000-mile, bumper-to-bumper warranties. If so, that should suffice.”

That said though, an extended warranty can be a smart choice, especially if you plan to keep your car for many years.

The upside

An extended warranty can be more tailored to your needs than a manufacturer’s warranty, says Leslie Tayne, a debt resolution attorney with the Tayne Law Group in Melville. They can offer more comprehensive and/or longer-term coverage, and services like roadside assistance.

“If the extended warranty is through a dealership, it’s more convenient, because the dealer will take care of the paperwork and transfer of payment involved in a repair.”

Be savvy

As with all contracts, read the fine print and shop smart. Says Sonia Steinway, president of Outside Financial in San Diego, “Start with your car insurance company. If you’re a member of AAA, you may be able to obtain coverage through your club. Search online for different options, so you can compare prices and coverage levels.”