When you purchase a vehicle for your small business, you want to be sure that you are making a wise investment. Protecting your investment is deciding whether or not to purchase a warranty for your business car.
In this blog post, we will explore the benefits and drawbacks of warranties so you can make an informed decision about what is best for your business.
What is a Warranty?
A warranty is a type of insurance that protects you from having to pay for repairs or replacements if something goes wrong with your vehicle.
Car warranty companies offer policies that typically cover certain parts of the vehicle for a specific period. For example, you may have a 3-year/36,000-mile bumper-to-bumper warranty that covers repairs to most components of the car.
Once the manufacturer’s warranty expires, you will be responsible for paying for any repairs or replacements out of pocket. Alternatively, you can purchase an extended warranty through a third party.
Manufacturer warranties are usually included in the vehicle’s purchase price. Plus, they often cover the Drive-Train and Transmission for a specified number of miles or years. You can also opt for additional coverage when you buy a new car to protect other systems.
Third-Party Extended Warranties
Independent third-party warranties must be purchased separately. They often cover major mechanical systems but are very specific about the precise faults they’ll take care of. They ask you not to do many things to prevent you from voiding your warranty.
What a Warranty Will Cover
It is important to note that not all warranties are created equal. Some warranties only cover certain parts of the vehicle, while others cover the entire vehicle. Additionally, some warranties have deductibles while others do not. Be sure to read the fine print carefully before purchasing so that you know precisely what is and is not covered.
The Pros and Cons of Warranties
There are both pros and cons to purchasing a warranty for your business vehicle. When making decisions about your investments, it’s critical to enter into the choice with as much information as possible.
Pros of a warranty of your business vehicle
On the plus side, warranties can give you peace of mind knowing that you will not be stuck with a hefty repair bill if something goes wrong with your car. Additionally, if you plan on selling your car within the warranty period, having a warranty can make it more attractive to potential buyers.
Some warranties have features that help you keep on top of routine maintenance with discounts or fully cover the costs of your oil changes, tune-ups, and other scheduled work.
Cons of a warranty for your business car
On the downside, warranties can be expensive and typically only cover repairs due to normal wear and tear. If you were to damage your car in an accident or through negligence, your warranty would not cover the repairs.
Additionally, some people feel that manufacturers’ warranties are unnecessary because most cars nowadays are very reliable and unlikely to experience significant problems within the first few years of ownership.
Making the Decision
Whether or not to purchase a warranty for your business car is ultimately up to you. If you feel comfortable taking on the risk of paying for repairs out of pocket, then forego the warranty in favour of saving some money upfront.
However, if you would prefer the peace of mind of knowing that repairs will be covered (at least partially), then purchasing a warranty may be the right choice. Be sure to do your research and shop around so that you can find the best deal on a quality warranty.
Consider in your budget whether you can continue your operations without a car or while paying for repairs and a rental while your vehicle is being worked on. Additionally, ensure that you can afford the costs of your warranty or repairs amidst the other ownership costs, such as insurance, maintenance, parking and registration fees. Fuel is an ever-fluctuating cost you’ll also need to consider before making lasting decisions before you get a warranty for your business vehicle.
How to Get the Most Out of Your Warranty Choices
Like any significant investment, you need to do ample research to ensure you have all the relevant information. This process may take some time, but you’ll be glad you did it when it comes to using that information. It may seem like the process is tedious and overrated. Still, when your warranty company pays to replace your fuel system or update your transmission three years into ownership, you’ll be glad you made time to grow your knowledge.
Ask Around and Compare Provider Options
As you begin your research process, compare several companies and their offers. Try to compare as close to the same coverages as you can from one company to the next. It’s best to compare apples to apples instead of to kumquats.
When comparing costs, remember that cheap isn’t always the best option. A few dollars saved upfront could cost you a lot more later if you have to file a claim and the company doesn’t cover it. Instead of opting for the cheapest company, try to find one with a solid reputation that offers good coverage at a fair price.
Look Into Discounts for Specific Models and Brands of Cars
Some carmakers have extended warranty programs that cover repairs after the manufacturer’s warranty expires. If you’re looking at a car from one of these companies, it might make sense to purchase its extended warranty rather than an aftermarket one. Additionally, some car dealerships offer warranties or extended service contracts. Be sure to ask about these when you purchase your car to compare the coverage and costs to other options.
Finally, some car insurance companies offer mechanical breakdown protection (MBP) as an add-on to your car insurance policy. This type of coverage can be a good option if you have a car with a history of mechanical problems. Be sure to ask about all your options before deciding so you can choose the best coverage for your vehicle and your budget. When it comes time to make a decision, you’ll need to factor in several elements. For example, the cost of repairs, the cost of the warranty,
Read Reviews and Ask for Referrals from Trusted Sources
Additionally, ask your friends, family and colleagues about their experiences with car warranty companies. Ask them if they’ve had to use their warranty and, if so, how the process went. If they had a positive experience, find out the company’s name so you can look into it further. If they had a negative experience, ask what happened and whether they would recommend the company.
Once you’ve narrowed your options to a few companies, read online reviews from trusted sources. These can give you more insight into each company’s customer service, claims process, and overall coverage. Read several reviews for each company to understand what others have experienced.
Check with Your Car’s Manufacturer
Another great way to get information about car warranties is to contact your car’s manufacturer directly. Many manufacturers offer proprietary and exclusive warranties for their customers that cover more than the standard plans. These plans might make sense depending on your car’s make and model.
Additionally, some manufacturers offer extended warranties that cover repairs after the standard warranty period expires. These plans can be a great option if you’re looking for long-term protection. Be sure to compare the coverage and costs of these plans to other options before making a decision to get a warranty for your business vehicle.
The Choice is Yours
Purchasing a warranty for your business car is a personal decision that depends on several factors, such as your budget and risk tolerance level. Be sure to research and compare different types of warranties before making a final decision about whether or not to purchase one for your business vehicle.
Consider other options to protect your business car, and have a plan to keep your business running when the worst happens with your primary rig. If you choose not to get a warranty, your best option is to stash away a portion of your monthly revenue into an automotive emergency and maintenance fund that will last until your next upgrade.
Thanks for reading!