You often hear that purchasing auto extended warranties will increase the resale value of your vehicle. Is this another “sales pitch” from overzealous salespeople, or is there some truth behind this claim?
Based on my 20+ years of experience working with and around the auto service contract industry, I believe there is. Here’s why;
Transferring your car extended warranty to a new owner is powerful selling tool.
If your warranty is transferable to the next owner, so is the peace of mind that comes with the extended car warranty. Given the opportunity to choose between two identical used cars, the one that includes an automobile extended warranty will have more perceived value.
If you sell your vehicle outright instead of trading in at the dealer, transferable used car auto warranties can make your vehicle more attractive and possibly worth more. Many people searching for used cars without factory warranty remaining are concerned about the possibility of an immediate breakdown. Why else would some people go through the extra effort and expense of having the vehicle inspected by a mechanic before purchase? A transferable extended warranty on car eliminates these fears and may help you sell your automobile faster and for a higher price.
Let’s Calculate the Real Extended Auto Warranty Value to You
So what dollar value can automobile extended warranties add to the resale of your vehicle? That can be difficult to pinpoint, but try answering these questions first:
1) How much is it worth to you to sell your vehicle faster and at a price closer to your initial asking?
2) How valuable is it to you to advertise your auto as being “worry-free from future breakdowns”?
3) How valuable is it for a prospective purchaser to know your vehicle will not surprise them with an unexpected and expensive breakdown?
4) If you choose to call your auto warranties companies and cancel the remaining portion of your extended car warranty, what is its prorated cancellation cash value you may receive?
Not only will purchasing extended car warranties give you peace of mind, it makes your vehicle stand out from other used cars when you decide to sell.
About the author: The Warranty Watchman, a.k.a. David Olthoff, has specialized in auto extended warranties for the past 21 years.