If you purchase a used car from a dealership, it's likely that you'll receive a no-cost, limited warranty. This coverage will probably last for the first 60 to 90 days of ownership. But what happens when this free warranty runs out?

You'll have to pay for maintenance work and repairs out of pocket, unless you buy an extended warranty. Sometimes called a "service contract," an extended warranty can provide everything from minimal coverage to one that is very comprehensive. It all depends on how much protection you want and what you're willing to pay.

Questions to Ask Before Buying an Extended Warranty on a Used Car

extended warranty, used car, service contract
According to a recent survey from Consumer Reports, about half of all car buyers who purchase an extended warranty actually file a claim while the coverage is in effect. This means consumers may look at the purchase of a service contract as something of a gamble.

If the Consumer Reports survey is accurate, there is a 50 percent chance that opting for an extended warranty will pay off. On the other hand, there's a 50 percent chance that you'll just be throwing money away on coverage that you don't need.

Of course, some car buyers view service contracts differently. For these individuals, there's value in having peace of mind. So, even if they never have to use the warranty coverage that they're paying for, they're still investing in a worry-free ownership experience.

Therefore, whether or not you should buy an extended warranty on your used car is a matter of personal preference. Practically speaking, there are a few questions that you should ask yourself before committing to a service contract.

Do You Plan to Keep the Car for a Long Time?

If you see your current car as a temporary means of getting around, paying money for warranty protection may be unnecessary. Then again, if you're saving up money for a better vehicle, having to shell out a large amount of cash for a major repair could set you back. So, there's still an argument to be made for investing in some type of coverage.

On the other hand, if you intend to drive your car as long as possible, purchasing a service contract makes a lot of sense. Even if the warranty seems expensive, it's probably cheaper than making payments on a new car. Buying a service contract and holding on to your vehicle for a few extra years could save you some money.

Do You Do a Lot of Driving?

If you have an extra long commute or travel for your job, it won't take long for all of those miles to take their toll on your vehicle. And if you travel nearly every day, you may be driving on rough roads or in harsh weather conditions.

If you know that a newly purchased used car will be put to heavy use, buying an extended warranty is a fairly safe bet. It could save you money and some of the stress related to knowing that your vehicle might break down when you're many miles from home.

Are You Buying a Vehicle that's Considered Reliable?

Car reviews can be helpful when shopping for a vehicle, but they can't predict the future. Highly-rated cars break down too. However, if the used vehicle you've purchased has poor reliability ratings, investing in a service contract might be a smart move.

Why would you buy a car with not-so-great reliability ratings? Maybe you got a really great deal that you couldn't pass up. Or, perhaps you just didn't know about the bad reviews until after the purchase was made. Whatever the case may be, if your make and model has a poor track record, you may feel a little better about driving it if you have an extended warranty.

Financing Assistance for Bad Credit Car Buyers

If you're buying your first car or replacing your current vehicle with a more reliable model, you may be worried about your bad credit. After all, getting the financing you need with credit issues can be hard. But, luckily, Auto Credit Express can help make the process easier.

We can match you with a local dealership that can work with unique credit situations. Our service is free and comes with no obligations. Basically, you have nothing to lose. So, go ahead and fill out our simple and secure auto loan request to get started today.