Casper Rent A Car

When you are out shopping for a new car you will find that many salesmen push the purchase of extended warranties. They gloat about how well their make of car offers the best extended warranty in the market and how it is so important to have one.

They have been taught well. Service contracts or extended warranties whatever you want to call them have always been very good extra income for car dealers. Since you have no idea of knowing the mark up on the warranty then you cannot easily determines its worth.

There are documented examples of where dealers make more profit on the sale of an extended warranty than they do on the sale of the car. And some dealers even offer the extended warranty that are not factory backed policies which make them as close to useless as they can be and on top of that they are very expensively priced.

The prices of these warranties have gone up for the dealer like everything else and it is only natural to pass that cost along to the customer. Warranties that once cost the dealer $200 and $300 are now costing anywhere from $900 for family sedan to $1,400 for a four-wheel drive vehicle. The problem is that the dealers are often times selling them with 100% or more mark up to the customer.

There are other sources as well where you as a new car buyer can purchase extended warranties to protect your car and at more reasonable prices. These contracts when not purchased directly from the dealer are often times referred to as service contracts. The majority of new cars qualify for one of the service contracts and they generally run between $400 and $700 depending up the car purchased.

So when the dealer offers an extended warranty for $2,000 to be added into the loan you may want to think twice before saying yes. Not only will you pay the $2,000 but also interest on that over the course of the loan. The interest will not amount to much but you can purchase a service contract from another source for 25% of the cost.

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