Whether you’re buying new or used, a vehicle is one of the biggest purchases you can make. Naturally, you’ll want some added protection for it.

Most dealerships provide a standard warranty on their vehicles, but for maximum protection, you’ll need an extended warranty. Extended warranties come in two flavors: first-party and third-party. First-party warranties are provided directly by the dealership, so you’ll always know where to go if you’re in need of repairs. Third-party warranties aren’t provided by the dealership, so it’s tough to say exactly what you’ll get out of one.

For the sake of simplicity, we’re going to focus strictly on third-party warranties today. Is it smart to invest in these types of deals, or are you treading into dangerous territory by getting one? Let’s dive in.

First of all, we have to address an important issue: don’t bother with a third-party warranty if it isn’t offered to you at the dealership. Unscrupulous scammers have been known to use third-party warranties to unjustly part you with your money, and many of these phony offers are advertised via emails and robocalls. In 2011, the Federal Trade Commision actually refunded $4 million to people who were scammed by illegitimate warranty offers!

Even if you sign up with a legitimate service, you run the risk of paying for coverage that your vehicle can’t even use. At least a third-party warranty sold by a dealership comes with a guarantee that your vehicle can make use of it.

With that out of the way, a third-party warranty offered by your salesperson may be a good deal. However, you’ll need to ask a lot of questions before you pull the trigger. For starters, you’ll want to ask your salesperson if they are, in fact, offering you a first-party or third-party warranty. The two can look remarkably similar at a glance, and you’ll want that point clarified right away before signing any dotted lines.

Once that’s established, ask what your warranty won’t cover. Features that you might take for granted in a first-party warranty won’t necessarily be the same in a third party warranty, though your mileage may vary in how much that matters. For example, some third-party warranties won’t cover out-of-state service, even if you take your vehicle to its respective brand’s dealership. It’s easy to get swept up in the excitement of purchasing a new vehicle, but you’ll want to know as much as you can to decide whether the warranty is worth your cash or not.

In short, third-party extended warranties are usually riskier than first-party ones. This isn’t to say you shouldn’t get one, but you should think the prospect over a bit. Heck, consider doing some research on your own if you’ve got the gumption for it! But if all of that sounds like too much work, consider giving me a call to help pick out your next vehicle and warranty. I promise to give you a deal that will earn your confidence, and you won’t have any questions about what it will or will not cover. If you’re in the market for peace of mind, I’ll give you the quality you deserve.