Financing Your Vehicle Warranty

While rolling the extended warranty into your car loan sounds like a good idea, please keep in mind that you will be paying 6-10% interest for years on that extended warranty.

High pressure car salesmen try to lure buyers into purchasing an extended car warranty by rolling the price into the sales price of the vehicle. They are basically increasing their commissions by quite a lot – standard is to at least double the cost of the warranty.

An $1,800 extended warranty will end up costing you about $2,650 with a 5 year loan at 8% interest. That doesn’t even included the commission that you will be paying to the salesman, the finance guy and the dealership for acting as the broker!

Some companies have started offering a finance plan for their buyers.