If you’ve ever purchased a new or used vehicle, you’ve most likely been offered an extended warranty. The inevitable question follows: Is it worth it? The answer is, it depends on factors like how long you anticipate owning your car. But if you’re a person who values peace of mind and wants to be protected from potentially hefty auto repair bills down the line, then paying for one is likely worth the investment.

Most major vehicle repairs occur after the car’s original factory warranty ends. Without that extra coverage, the financial burden from unforeseen and costly repairs can be severe, particularly in the current environment. “Not only do cars cost more right now, but parts are also more expensive and harder to come by,” said Deanna Bublik, American Airlines Federal Credit Union’s Manager of Consumer Servicing and Lending Products. In fact, Bublik reports that the Credit Union's extended warranty provider, IWS, paid out nearly $1.2 million in claims during 2021, including a single claim totaling nearly $16,000 for one auto repair job.

Extended warranties can vary in price, duration and coverage, so doing your research is recommended. According to AAA, the optimal time to purchase a warranty is before the original factory warranty runs out. The Credit Union’s Vehicle Service Agreement is frequently cheaper than others from dealerships, auto clubs and insurance companies, and can be tied to financing to help reduce your payments while you’re planning a vehicle purchase with a Credit Union loan officer. However, a member can add a warranty to their vehicle at any time, whether or not the loan is financed with the Credit Union.