How to Negotiate the Best Price for an Extended Warranty
This means you should negotiate AFTER you've agreed on the price of the vehicle, but before you sign any paperwork. Don't let the dealer "throw in" an extended warranty with the price of the car - that's a sure sign they're ripping you off.
A big advantage to buying one is that you can usually cancel and get a full refund within the first 30 days, so even if you don't get a good deal you can still comparison shop afterwards.
That being said, you really shouldn't agree to buy one unless you've already comparison shopped with several different dealers.
The first thing you want to do is figure out what terms fit you best. Do you drive a lot of miles each year and need a lot of coverage? Are you comfortable paying a deductible, and if so, how does that affect the price?
These are questions that can be answered by the Finance Manager at the dealership where you'll be purchasing the car. They can go over all the different plans, the pricing for each one and answer any other questions you may have.
It's important to note that dealers will markup the price by as much as 200%, so you should ALWAYS negotiate the price of an extended warranty.
When the finance manager gives you a quote, just tell them it's way too expensive and you're not interested at that price, but if they can do better, you'll consider.
They will usually offer you a better price at that point. You can keep asking them to do better or tell them you're not interested until they won't bid any lower.
At this point, let them know you'll be comparison shopping with other dealers and have them confirm that's the best price they can offer you.
Remember, you don't have to buy the extended warranty at the same time you purchase the car. Take your time comparison shopping.
Call up a few different dealers and ask them for their best price on an extended warranty with the same terms. If they can't beat the price you have, let them know and see if they can do better.
Getting the best deal on an extended warranty is simply a matter of doing enough comparison shopping. You'll see it's easy once you do it.
My Recommendation for Car ShoppersTrueCar No-Haggle, CarsDirect, and NADAGuides are the quickest way to see the lowest car prices in your area. These sites show you no-haggle prices from dealers closest to you - and the deals are usually really good. This should be the first step you take when negotiating your car price. Follow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid