Most folks who buy a new car oftentimes will also buy an extended warranty. Consumer Reports surveyed 8,000 of its readers about extended warranties purchased on new 2001 and 2002 vehicles. About two-thirds of them said the extended warranty did not pay off. The extended warranties cost on average $1,000, but only provided an average benefit of $700. That’s a net loss of $300. Forty-two percent of the people in the survey didn’t use the extended warranty at all, mainly because they didn’t need repairs or because the manufacturers’ standard warranty covered the repair.
If you’re buying a new car, Consumer Reports says your best bet is to buy a vehicle with a good record of reliability, so that you can skip the extended warranty. I suggest letting Consumer Reports help you find a reliable vehicle. It predicts the reliability of new cars based on its subscriber survey, which covers more than a million vehicles. This year Honda came out on top as the most reliable vehicle manufacturer overall. I have never believed an extended warranty purchase was a good idea. I agree with the recommendations from Consumer Reports.
Source: Consumer Reports
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