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Should I buy an extended warranty for my car? Add to ...

I was wondering what your position is on purchasing extended warranties for your vehicle after your original has run out. I have a 2007 RAV4. - Al in Trail, B.C.

It seems almost a motorist's rite of passage to experience, or at least sympathize with others, over a warranty horror story. Whether it's a motorist who didn't buy an extended warranty and paid a price, or another who paid a pretty premium but whose repair was ruled out by the small print. So, should you consider one?

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We've all heard many times that a car is likely the second-biggest purchase we'll make after a home. Maintenance and repairs can also be expensive, and unexpected. Typically, you'll be three to five years into new-car ownership when the manufacturers warranty runs out. By then, you've clocked some kilometres and it's more likely things will go wrong from that point on.

The price of an out-of-warranty repair can easily be more than the cost of an extended warranty. A friend of mine just purchased a used Touareg. He has decided on an extended warranty. The vehicle is in excellent condition now, but he says he's concerned because Touareg had a major driveshaft failure issue in the first years of production. Out of warranty, it would cost a lot to fix.

What things should you watch out for? Deductibles, service interval requirements, coverage (i.e. does the contract require maintenance and repairs be done exclusively at the dealership?) and the fine print in general as to what is and is not covered. The reputability of the warranty provider is also very important.

According to Toyota Canada, a 2007 RAV4 (just like yours) comes with Toyota's standard three- year/60,000-km comprehensive manufacturers warranty, and its five-year/100,000-km powertrain warranty. Those warranties come with a new vehicle, and stay with the vehicle, regardless of the owner.

"We have two types of extended warranties. One is with Toyota, and the other is recommended by Toyota," says a spokesperson at Westminster Toyota in Vancouver. "Mileage, model, and the year of your vehicle will determine which you are eligible for. In order to get a Toyota extended warranty you have to get it from the dealer. Whether you buy used or new, you have to buy this warranty from Toyota when you buy the car."

Manufacturers offer extensions to their warranties, but usually only at the time of vehicle purchase, such as extending the four-year warranty to seven years. Typically, they're more expensive than aftermarket warranty companies.

Aftermarket companies offer a diverse selection - from powertrain to full warranties. Prices and terms differ. Obviously, you'll pay extra for more coverage. In any case, again, make sure you check the fine print. Some warranties cover wear and tear on parts, while others only cover breakage.

"The purchase of an extended warranty is all about understanding the exclusions, and your responsibilities. They all come with nice glossy brochures and they all say they're going to do stuff, but the latter pages of the brochure and the warranty itself tell you what's excluded - what's not going to be fixed if you abuse the vehicle or don't maintain it properly. The public have to understand that they have some obligations when they buy an extended warranty," says Bob Pierce, director of member services for the Used Car Dealers Association of Ontario.

If you find a reputable provider that offers acceptable coverage for an attractive price, an extended warranty can be a good insurance policy against unexpected major repairs. It's a fixed amount, so you can plan and factor that into your vehicle ownership costs up front. A transferable extended warranty is also good for the resale value should you wish to sell down the road.

E-Mail Ask Joanne at globedrive@globeandmail.com

What to put in your winter survival kit

A Sarnia police officer checks on stranded motorists on London Line, East of Sarnia, Ont., on Tuesday Dec. 14, 2010. Two military helicopters took to the air to try to help 300 people trapped in their vehicles by a snowstorm.
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