SCENARIO 1: If you are Single, with no family obligations, make less than $40,000 per year and plan on keeping your new car or truck at least 5 years - Consider an extended warranty. Why's that?



Well, I've found that most in this scenario are either recent college grads just starting out on there own or those that work in a specific trade.

The recent graduates are still trying to pay off huge student loans and deal with all the other normal expenses associated with life on-their-own. That situation severely limits their expendable cash resources.

For those in a specific Trade - most enjoy a comfortable lifestyle and a large, unexpected, out-of-warranty repair can put a painful cramp in that lifestyle.

SCENARIO 2: For those single folks with no family obligations that make more than $40,000 per year and plan on keeping your new car or truck at least 5 years - Skip the extended car warranty. For most in this group, a large, unexpected repair is affordable. The only exception to this scenario are those stuck in a week-to-week paycheck mode - you might want to consider a warranty.

SCENARIO 3: If you are married, with no family obligations, make less than $60,000 per year and plan on keeping your new car or truck at least 5 years - Consider an extended warranty. Why? For the same reasons listed in Scenario 1.

SCENARIO 4: If you are Married, with no family obligations, make more than $60,000 per year and plan on keeping your new car or truck at least 5 years - Skip the extended warranty. Why? For the same reasons listed in Scenario 2.

SCENARIO 5: If you are married, with kids, make less than $60,000 per year and plan on keeping your new car or truck at least 5 years - Consider an extended warranty. Most folks in this situation are stretched to the limits already. Family obligations usually limit expendable cash and an expensive repair will be financially painful.

SCENARIO 6: If you are Married, with kids, make more than $60,000 per year and plan on keeping your new car or truck at least 5 years - Skip the extended car warranty. Why? Typically these folks do have some expendable income and can handle the cost of a large out-of-warranty repair. However, if this scenario fit's you, and you're over-your-head in Credit Card Debt and other bills....it might be wise to look at a warranty.

SCENARIO 7: Those who are leasing or plan on getting rid of the car, truck, van or suv before the Manufacturer's Warranty runs out, skip the extended warranty. Why pay extra for coverage you don't need.

SCENARIO 8: Those who plan on "driving-the-car-till-the-wheels-fall-off" - Consider skipping the extended warranty as well. The Cost vs. Benefit just isn't attractive for folks who keep cars for a very long time.

I've found that 99.9% of all new car buyers match one of these scenarios - just use the one that fits your particular situation.