8 Times Buying an Extended Warranty Is a Surprisingly Smart Choice

Extended warranties have a long reputation as being one of the worst money moves for car owners. Time and time again, they're deemed a total rip-off, designed to lure car owners into spending money they'll never actually get back.

Typically, these warranties extend beyond the manufacturer's warranty for a finite number of years or miles, covering repairs that may occur during that period. There are stipulations, of course, and that's often where the misunderstanding comes from.

Given the current climate in the car industry, with sky-high prices that don't appear to be coming down anytime soon, an extended warranty could make sense. Here are eight times when buying one is worth it.

Unreliable vehicles will require more repairs and incur higher maintenance costs. But whether it's the look, the features, or the brand name, people still purchase them.

If you're taking a risk on a less-than-reliable car, it could be a good idea to look into the extended warranty. The last thing you want is a car that looks sleek, but the engine doesn't work.

More advanced features could mean higher repair costs and specialized repairs if something goes wrong. Your state-of-the-art tech system may have been a selling point, but it will be less appealing when it breaks and you're stuck with the bill.

If you bought your car primarily for its features, it might be a good idea to consider getting an extended warranty. When your back-of-seat TVs break, you (and your kids) will be glad you have it.

Often, when people say extended warranties aren't worth it, they're thinking of car owners who trade their vehicle in every few years.

A manufacturer's warranty often covers up to five years or 60,000 miles. If you won't keep your car beyond that timeframe, it doesn't make sense to pay for an additional warranty. However, if you plan on driving the car into the ground, it's a smart move to spring for the extra coverage.

Extended warranties typically cover vehicles up to a certain mileage or time limit. That means if you often take long road trips, then you could blow through that number long before the limit is reached, with no coverage for the remainder.

However, if you are primarily a local driver, then you can get the most out of the extended warranty.

If you're buying a used car and your vehicle has already outlived its original manufacturer's warranty, buying an extended warranty can help give you peace of mind.

It might not cover everything that the original extended warranty would have included, but it will help bridge the gap between paying for any repairs out of pocket and having some major incidents covered, especially for particularly old cars.

Some extended warranties require you to go to the dealership for any service appointments, and going elsewhere could void your extended warranty. In these cases, car owners who are diligent about only going to the dealership are better candidates for such extended warranties.

An extended warranty will cost you money in the immediate, but it could save you from major expenses in the long term.

If a repair bill comes up that's more than your typical car maintenance, you'll be glad to know that you're covered, particularly if you don't have that money already sitting in savings.

Think of this as a way to protect your emergency fund, particularly if something like the engine or the transmission goes out.

Buying an extended warranty through a third-party vendor can be risky, as coverage and reliability can vary.

If that vendor shuts down, your warranty purchase goes along with it. On the other hand, purchasing an extended warranty through the automaker may be a more secure option. You know the odds are in your favor that they'll be around when it's time to file a claim.

Whether you're comparing auto insurance rates or shopping around for the best warranty options, there are more than a few ways you can take your car ownership costs into your own hands. Every individual situation is different, and it's best to take the time to research your options and find the best plan for you.

Look at your anticipated mileage, how long you plan on owning the car, and your auto loan rate. Taking all of these calculations into account will help you determine the right decision for your next trip off the lot.