Pros and Cons of Auto Repair Insurance

Auto repair insurance includes items such as warranties from the car dealership or manufacturer, and there are good and bad things about them!  Should you purchase insurance for your vehicle? Unfortunately, as with most things in life, there is no clear cut answer.  But there are some hints that can help you to determine if you should.

First and foremost, find out what sort of reputation the car you intend to purchase or the vehicle you already have has.  What are the reliability ratings from sources such as Consumer Reports or Car and Driver.  This can help you to determine what the likelihood is of keeping you car out of the shop.  For instance, one of most reliable vehicles for the past couple of decades has been the Toyota Camry.  That’s why the price of a used Camry has remained high.  But as we all know, Toyota had some recent problems with acceleration, and even some deaths have occurred because of it!  So nothing is foolproof.  It’s a game of odds….what are the odds that your car or truck is going to hold up in the long run?  Are you going to keep you car for a long time, or trade it in every few years?  As you can see, there are no pat answers for everyone concerning the purchase of repair insurance or extra warranties.

So, what to do?  Once you find out the reliability of the vehicle, that will help you to determine if you need extra coverage.  Also, the cost of the vehicle is important.  For instance, does it make sense to spend a couple of thousand dollars on a vehicle that cost under $15,000?  Hardly, and you probably are throwing your money away.  For the most part, cars are made to hold up quite well today, as opposed to a few decades ago, when many manufacturers had a whole litany of problems and issues.  But if you are investing close to a hundred grand for a vehicle, something such as a BMW 7 series, then purchasing an extended warranty makes a lot of sense.  Why?  Isn’t BMW one of the highest rated cars on the road?  Yes, it is, but it’s also a very expensive car to maintain.  Replacing some parts on these cars can cost upwards of a couple of grand!  Also, BMW dealerships aren’t cheap in the labor department.  This is not to single out BMW, as they are fine cars and I own one, but it’s just an example of whether it makes sense to purchase additional insurance.  And in the case of BMW, it does!

In summary, factors such as cost, reliability, how long the purchaser is going to keep the car, and cost of maintenance are all important elements to help you to decide if repair insurance is for you.  The best thing is to do your homework in advance, and after you add up all of the pertinent factors, you should get your answer.