We live in times where owning a car is much easier than maintaining it properly. The same salesman who sweet-talked you into purchasing extended car warranty, which he patiently and tactfully described as a now-or-never-deal, usually turns out to be elusive the moment you drive out of the car dealership. He would’ve convinced you that paying a little extra promises years of stress-free vehicle ownership.
Nowadays, salesmen do not bring up the topic of extended warranties unless the customer notices it in the check list and asks them why it is ticked. Many auto dealerships are known to be in the habit of burying extended warranty coverage in the difference of price between ex-showroom and on-road figure. When a careful buyer questions of its necessity, there begins the sweet talk that includes a story of how an old customer saved several thousands of rupees when a vague failure of critical component occurred out of the blue. Either way, the dealerships manage to successfully sell most of the vehicles along with extended warranty.
So is it really worth paying extra for what is described by our dealer as a potential savior from huge repair costs in case something happens to the car’s critical components post the standard warranty period? Or is it worthwhile to invest that money in a zero depreciation bumper-to-bumper insurance?
Well, the terms extended warranty and zero depreciation insurance, though are technically much different from each other, they promise more or less similar outcome at the end of the day. Both have their own positives and negatives.
Barring components that are subjected to wear and tear like tyres, battery, brake pads, other items can be replaced free of cost under both paid additional warranty as well as zero depreciation insurance coverage. The key difference between the two is that the former promises to spare you from a wallet busting repair that may arise due to manufacturing defect by replacing the concerned component free of charge, not even labor fee. The latter promises to do the same in case the damage is due to an accident.
Let’s say your car suffered a transmission failure a few months after your standard warranty (normally 2 years/50,000) expired and you luckily have opted for an extended warranty and hence, as per the assurances of the sweet talking salesperson who sold you the vehicle, you are entitled for a replacement of the transmission free of cost.
However, in most such cases, the customers would be asked to shell out an enormous sum because the dealer is convinced that the gearbox went kaput not due to a manufacturing defect but due to possible poor maintenance or physical abuse. Let’s face it, the chances of successfully using the extended warranty to replace a critical component such as the transmission is extremely less. (Kindly drop a comment if you have a positive experience in this regard. Thanks!) The salesman who told otherwise would probably be in a different dealership by now, convincing more customers with similar set of justifications!
Coming to the zero depreciation insurance cover policy, it covers pretty much the same items that a paid car warranty covers in addition to any damage to body panels but mind you that it can’t be used if the reason for the component’s failure is not a physical damage.
Options for car service and maintenance after warranty period
So which one is the best choice to spend on? We are inclined towards the zero depreciation insurance policy simply because it has historically proven to keep up its assurances a little better.
Curated from Extended Car Warranty vs Zero Depreciation Insurance