In my last post, I went over how to decide whether to purchase an extended warranty—or Vehicle Service Agreement—along with your new or new-to-you car. In it, I said that if you’re purchasing a brand new car, you should pass on the extended warranty and reconsider when you’re closer to the expiration of the manufacturer’s warranty. I want to dig into that a little deeper, because there are a few situations where I think it makes sense to secure an extended warranty up front.

If some or all of the conditions below apply to the new vehicle you’re taking home from the showroom, it may be better to say yes to a Vehicle Service Agreement from the get-go.

    1. You're Keeping it for the Long Haul

      Since we’re talking about purchasing the Vehicle Service Agreement (VSA) up front while the manufacturer’s warranty is still good for three plus years, you want to be sure that you’ll still own the vehicle at that point. Otherwise, what do you need the extended warranty for?

      Of course, no one can perfectly predict the future, but if you feel confident you’ll be keeping your new car or truck for a long time, particularly once you get into the 7+ year range, protecting your purchase with a VSA now makes sense.
    2. It's Not the Most Reliable Make or Model

      Some vehicles have better track records than others. While no one knows yet how well a brand new model will hold up over time, the manufacturer’s history gives you a clue, and older models of the vehicle do too. A little research online can help you steer clear of the biggest culprits, but if your heart is set on a vehicle that seems susceptible to trouble, it would be wise to get some extra protection in the form of a VSA.
    3. You Want Even Better Protection

      What’s neat about our Vehicle Service Agreements is that you can customize them to meet your needs. The manufacturer’s warranty generally covers the big stuff for a limited amount of time. If you would rest better knowing that no matter what goes wrong, you’re covered, you definitely should consider a VSA from the beginning.

      VSA protection is on top of the manufacturer’s warranty and can fill in a lot of gaps for things that are never covered by the manufacturer. A powertrain warranty, for instance, usually only covers things that make the car move. So, something like air conditioning wouldn’t by covered in a vehicle with only a powertrain warranty. A major AC repair could cost you around $2,500 [ADS].

If the descriptions above match your new vehicle, buying an extended warranty up front makes sense. Particularly in the case of number 3 where you would be using the warranty before the factory warranty expires. There’s another big reason to consider the purchase sooner rather than later—it can be a lot cheaper to buy it early

In my previous post, I talked about how a VSA is kind of like health insurance. You hope you don’t have to use it, but you’re protected if you do. It also has similarities to life insurance. It’s cheaper to buy when you’re younger because you’re less likely to die young. A VSA is cheaper to buy when your vehicle is “younger” because statistically, you’re less likely to still have it when it gets into that age that it’s more likely to have major problems.

“Oh no,” you say, “I already bought my car and said no to the extended warranty, but you’ve changed my mind!” Don’t worry. It’s not too late. You can purchase a Vehicle Service Agreement any time. You can also customize the coverage to what matters to you.

Want to talk through your VSA options? Give us a call: 484-223-4216.



Giovanni Pabon

Giovanni Pabon

Gio is an Assistant Loan Manager at GOLD. He focuses on making processes and workflows more efficient for GOLD. Gio finds satisfaction in positively impacting the quality of his team's work and helping our Members achieve their goals through lending. 

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