Have you shopped around first?
This is the first rule when you are looking to make any major purchase. You can’t just dive in head-first and take the first deal that is offered to you. Buying warranty is the same as buying anything, they not all created equal. Get a quote for extended warranty on the car you are planning to buy from several different dealerships, finance or insurance companies and see where you can get the best deal. If it’s out of your price range right now, you can always purchase it at a later date.
What is your repair history like?
You also have to think about what your history with cars is like. Do they tend to break down on you often because of heavy use? Are the roads you frequently drive on off road? If your car will be used more than a vehicle that drives to the local shop and back, warranty is probably going to be of great value to you
What is covered by the warranty?
Before putting money down for extended warranty, check what is covered, first. A lot of the time, the parts that are likely to break down are not actually covered by the warranty, so you take it out for nothing. In addition, there are different coverage tiers, rising in expense proportionally with the amount of things covered. Is the price justified? Do you really need it? Decide before you buy.
Who is backing your extended warranty?
Make sure that you check who backs the warranty, make sure they are reputable and make sure it’s an insurance product and not a contract or discretionary warranty.
Can you live without it?
Finally, you have to make the decision that is most cut-and-dry: do you really need it? Can you live without it? Will you be sorry if you don’t purchase extended warranty? The right warranty product at the right price is worth its weight in gold.