Extended warranties on new cars don’t always pay

An extended warranty is a good idea for brands like Audi, Mercedes-Benz, BMW, Cadillac and Lincoln if you plan to keep the car for several years.

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From the February/March 2014 issue of the magazine.

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Q: “Should I buy an extended warranty with my new vehicle?”

—Jenna Watson, Fernie, B.C.

A: The answer depends to a large degree on what vehicle you’re buying and where you plan to have it serviced. Luxury vehicles are complex, and most European and domestic luxury models are expensive to repair and subject to failures as they get older. An extended warranty is a good idea for brands like Audi, Mercedes-Benz, BMW, Cadillac and Lincoln if you plan to keep the vehicle past the end of the original warranty. For a simpler vehicle with good predicted reliability, the likelihood of making a significant claim is much lower. However, if you’re planning to use the dealer for routine service, complete warranty coverage eliminates a lot of the uncertainty surrounding the cost of repairs as the vehicle gets older.

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