One of the most endearing reasons for buying a used car is the low cost. However, you may find yourself paying much more for breakdowns and failures soon after making the purchase. One of the ways to guard yourself against having to go bankrupt because of expensive repairs is to buy a used car warranty. Its main purpose is to help you cover the costs of repairs in case your car fails. Nevertheless, there are a few scenarios when you would be better off cancelling the warranty and asking for a refund.
- High Costs
Used car warranties are not cheap. You will have to pay a certain amount of money to ensure that you are covered. In the end, you may find that you are paying more than you thought you would or was led to believe. Remember that in many cases, insurance companies do their best to convince prospective policy holders about the importance and benefits of a certain coverage package because a purchase would make profits for them.
- Lack of Agreement
There must be an agreement between you and the company selling you the used car warranty on the conditions, costs and other details of the warranty. Unfortunately, you may find out that the warranty was included in your car financing agreement without your consent. The additional expenses are then cleverly hidden by prolonging the loan term. In that case, you should cancel the warranty and ask for a refund or demand that the balance be deducted from your loan to enable fast payment.
- Exceptions
It is not always possible for used car warranties to cover every defect that your vehicle may develop. This means that you still have to pay for some repairs out of your own pocket. Still, you will have paid for the warranty. Therefore, you may decide to cancel the warranty to remove the double expense. In other words, you decide to pay for every repairs and maintenance of your vehicle whenever there need be and whatever the cost.
- You Don’t Need a Warranty
As mentioned, the biggest beneficiaries of used car warranties are insurance companies. Thus, they pressure car buyers into purchasing them. This does not mean that the warranty will not benefit you in one way or another. Still, you may find that you have never used it to cover your vehicle’s repair. Even if you do, the cost of the warranty compared to the expense of the car’s repairs is much higher. In that case, therefore, you don’t really need the insurance simply because it comes with no benefit for you. You can cancel the warranty and be content with paying for the repairs from your pocket.
Conclusion
It is not easy to come up with a firm decision on whether to cancel a used car warranty or not. On one hand, there is the possibility of your car breaking down when you don’t have the money to get it back on the road. On the other hand, it may be a long time before your car develops problems, and when they happen, they may require only a small fraction of the money you paid for the warranty. Some situations will, nevertheless, help you make a decision. Among the most important is a scenario in which you were deceived into paying for the warranty as well as its inability to cover all expenses. You may also determine that the warranty is not worth the cost.