Not all extended vehicle warranties are created equal. Some people swear by them, while others swear at them.

Here are a few tips to help guide you toward a decision that’s right for you.

Don’t Be Pressured. Some dealerships push customers to buy extended warranties at the time of sale. But you may be better off shopping around to compare third-party, or “after-market,” service contracts. Do your research, but be aware that prices for service contracts tend to go up sharply as the basic manufacturer’s warranty draws to an end.

Think ahead. Consider how much a major repair bill would rock your household budget. If that’s a scary thought, paying upfront for a service contract could be a wise choice. Just know that some repairs may not be covered by the contract. Most manufacturer warranties on new vehicles cover at least three years or 36,000 miles. If you’re likely to purchase another new vehicle after a few years, an extended warranty probably wouldn’t make sense. On the other hand, if you tend to keep vehicles longer, an extended warranty may be a good fit.

Know who’s got your back. While bargain shopping is a good idea, weigh the price of the service contract against the quality of the company that backs it. Manufacturers or respected financial services companies are generally a safe bet, but consider after-market warranty companies with caution.

Compare apples to apples. Lower-end warranties often cover only major mechanical breakdowns, while midpriced contracts may cover some normal wear and tear. The most expensive contracts are often “bumper to bumper,” covering all but a few types of repairs. Also, compare deductibles and find out how you’ll pay when repairs are made. Some policies require you to pay the mechanic out of pocket and file for partial reimbursement. Others may require a copay.

Scrutinize the fine print and see who’s qualified to perform service. Some warranties require proof that you’ve kept up with routine maintenance.

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