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What is it?

Every car today rolls out from the showroom with a standard feature – a warranty. It's a written assurance, which states that the manufacturer will replace or repair any faulty part if it fails, with?some limitations. Different manufacturers have different warranty schemes, ranging from a 2-year/40,000km to 3-year/unlimited km. But what do you do once this period expires? This is where the extended warranty comes in. It is an additional warranty that you can buy at the time of purchasing the new car, or in some cases, before the standard warranty expires. Like with standard warranty, this warrants to replace or repair specific parts if they malfunction.

Do you really need it?

Buying an extended warranty is largely dependant on the ownership plan of each individual. If you plan to use the car within its standard warranty range and then sell it off, you could forgo the extended warranty; but it can help with negotiations and result in a better resale value. However, if you are planning to keep the car for a period that'll outrun the standard warranty, then it clearly works out to be quite beneficial. Yes, cars today are more reliable than ever, but, as with anything mechanical, there can be failures, especially after two or three years. This is where the extended warranty really helps.