Should You Go Into Debt to Pay for Unexpected Auto Repairs?

The cost of owning a car does not end when you buy it. There are plenty of considerations that you must take into account, including unexpected auto repairs. Car repairs are not cheap and can even be unreasonable at times. If you’re buying a new car, this won’t be a problem since it will come with a manufacturer’s warranty. 

But if you’re getting a secondhand car or your original coverage is coming to an end, you need to consider how you’re going to fund the repairs. Fortunately, you have the option of getting an extended auto warranty, which takes effect once the manufacturer’s coverage expires. 

You may look for different options for your provider online by reading articles like CarShield reviews. Below is a discussion of an extended car warranty and how it can help with unexpected auto repairs.

About Extended Auto Warranty

According to The Balance, manufacturers, dealers, and third-party providers may offer an extended auto warranty as an add-on when you purchase a vehicle. You may use it to cover the cost of repair and parts replacement after the original coverage ends.

Although it’s common practice to avail of this type of service contract when you buy a new car, you can still purchase one before the current coverage expires. You can also use it for a secondhand car.

It aims to help car owners avoid potential out-of-pocket costs by covering repairs that may cost hundreds of dollars. Aside from covering repairs beyond the manufacturer’s warranty, it may also cover expenses for car parts that the original contract doesn’t include even when it’s still active. Examples of these parts are entertainment systems and onboard computers.

There are also instances where the manufacturer’s coverage requires a deductible you need to pay first before it kicks in. Some providers often place limits on specific expenses, like towing costs. The extended car warranty will take care of it as long as the service contract includes it.

Common Warranty Types

According to the AAA, the two most common types of extended car warranty are named-component and exclusionary. A named-component plan provides coverage for only the parts listed in the policy. The type of coverage differs depending on the level of the plan, such as gold, silver, and bronze. The higher the level of the plan, the more parts it covers.

Meanwhile, the exclusionary type is more straightforward in approach. Exclusionary policies cover most vehicle parts but identify those excluded from coverage.

Costs of Extended Auto Warranty

Because coverage varies, the cost of getting an extended warranty also differs from one provider to another. If you buy your vehicle from a dealer, chances are they will ask you to purchase an extended coverage too. Do not immediately agree to this because most dealers would mark up its cost to add to their profit.

If you’re on the hunt for one, you should consider negotiating with the dealer or talking to other third-party providers. Take time to read their quotes carefully and compare your options before deciding.

Getting this type of coverage may cost you about $1,000 or a few thousand up front, depending on the inclusions. Depending on the policy, deductibles are usually around $100 per visit or repair. You may choose zero deductible plans, but they will be more expensive.

You may also opt to include the warranty cost in your auto loan if you’re getting one. However, it will incur interest and other fees.

What to Look Out For

The AAA also identified several items you need to know when getting an extended car warranty aside from what parts are covered and how much deductible is required. You must know where to take your car for repairs. Some providers have specific repair shops that they accredit.

You also need to know if there is a waiting period and how long before the coverage takes effect. For example, some providers require clients to drive their car for at least 1,000 miles, combined with a 30-day waiting period before enforcing the policy.

Ensure that your coverage for repairs specifies whether it covers both the cause of damage and its subsequent impact on other parts. There may be instances when a car component breaks down, leading to further damage to other parts. Some providers only cover the initial damage but not the resulting ones.

Is This for You?

After learning about extended auto warranty and what it does, you may now know whether it can be helpful for you. Ask yourself how long you plan to keep your car. If you’re thinking of upgrading to another model after a few years, you may not need it at all. It may even be a financial burden for you in the short term.

You may also rethink your risk tolerance as a car owner. If you worry about shouldering high-cost and unexpected repairs, extended coverage will be a good purchase for you. But if these things won’t keep you up at night and you’re more worried about short-term costs, you may want to skip on getting one.

Final Thoughts

An extended auto warranty is something you get for your peace of mind. If you’re confident that you won’t have any significant trouble with your car based on past experiences, you may save money for emergency repairs. However, if the thought of getting into debt due to unexpected repairs terrifies you, buying one makes the most sense. 



Consideration of Car Insurance When You Need One

Unlike practically everything else in the world (even vehicles!) where it’s quite straightforward to comparison-shop for the cheapest costs, car insurance is a hard one since pricing for premiums are provided on a case-by-case basis. On top of that, not every insurance would divulge their costs easily or offer you a price online.

When it comes time to renew or get auto insurance, it makes perfect sense to use free internet resources to compare rates.

In Singapore, How Much Does It Cost To Insure a Car?

Need to get a Singapore car insurance? A year’s worth of coverage might cost anywhere from $700 to $1,000 — or even more! — depending on your location.

Your yearly auto insurance premium is computed on an individual case-by-case basis. In general, insurers attempt to determine how probable it is that you will be involved in an accident and how expensive it will be for them to cover the costs (i.e., the risk they assume).

How Can I Get the Best Deal on Auto Insurance?

It’s impossible to alter one’s driving history, driving record, or automobile. You may, however, search around to find the greatest deal for your specific profile and vehicle. To begin, obtain insurance estimates from at least five or six different firms. With the help of MoneySmart’s Car Insurance Wizard, you can easily obtain this information.

Insuring your vehicle should not be as inexpensive as it appears. Cheap insurance is worse than having no insurance since you’re wasting your money and putting yourself at risk.

High excess (the amount you must pay ahead before the insurer begins to pay for the remainder) and/or terrible terms & conditions (i.e. you can’t claim crap since EVERYTHING is excluded) are often associated with cheap rates. Check the fine print of your policy to make certain you’ll receive the protection you desire.

Directly Through an Insurance or Through a Broker, Which Should I Choose?

Keep in mind that rival insurers may offer lower rates to attract new clients. After all, our auto insurance specialists will perform the comparison for you while you rest and enjoy your time off. In the event that your current insurance provider offers a better bargain, at least you won’t have to worry about missing out on a better deal.

You may, of course, get automobile insurance on your own if you don’t mind going over the tiny print and checking out the facts.

Various Kinds of Car Insurance to Consider

Comprehensive Car Insurance

This sort of auto insurance, as the name indicates, covers practically everything, even the expense of repairing or replacing your own vehicle. This sort of insurance is the most frequent in Singapore because of the high cost of automobiles here.

Third Party Only (Tpo) Car Insurance

This is the most basic and least expensive sort of insurance since it only covers damage to the property of others. You’ll be on the hook for repairs to your own vehicle if something goes wrong with it. Most experts advise against attempting to fix a really old automobile that has reached the end of its COE lifetime.

Third Party, Fire & Theft (Tpft) Car Insurance

An enhanced form of TPO vehicle insurance. Except that TPFT also covers your automobile for loss, theft, and fire damage. Despite the fact that it provides a little extra security, this is typically just an option for drivers of older vehicles.


Most insurance companies in Singapore use a $500 or $600 deductible as a baseline for their estimates. The average amount that automobile owners are prepared to spend out of their own money may be derived from this figure. When comparing auto insurance rates, it’s important to consider both the premiums and the excess. If you choose a high excess, you can save money on your premium, but are you really willing to pay $2,000 if you are involved in an accident? It’s probably not going to happen.


5 Luminous Lessons Harry Potter Taught Us About Money

The magical story of a young wizard named Harry Potter has captured the hearts of fans of all ages and with a good reason. In fact, I am wearing my Hufflepuff shirt while I am writing this.

Despite being in a fictional world, the Harry Potter characters’ financial problems cannot be solved with a wave of a wand. They also have to struggle with the challenges of saving, spending, and growing money throughout the series. Here are just some of the personal finance lessons that you can learn form the wizarding world of Harry Potter:


In the “Harry Potter and the Chamber of Secrets” book, Ron and Harry crashed a car into a tree. It caused an irreparable damage to a car that they do not own. This scenario taught us the importance of having a car insurance.

In Singapore, it is mandatory to have your car insured. Examine your options and look for an auto-insurance that suits your needs and your budget. Some of the plans that you may consider are the FWD, Aviva, and NTUC Income auto-insurance plans. FWD has three auto-insurance plans from Classic to Prestige. Its annual premiums start from S$731.38. Aviva offers three auto-insurance plans too from Lite to Prestige. Its annual premiums start from S$883.12. Lastly, NTUC Income has Drivo Classic and Premium plans. Its annual premiums start from S$$970.35. Annual premiums are usually based on the driver’s profile and the car itself.


After living in an uncomfortable cupboard under the stairs for eleven years, the book’s main protagonist Harry Potter found out that he was a wizard and that his parents left him a considerable amount of money. His family’s wealth was beyond what he can imagine! Although his parents died at a very young age, when he was just a baby, it was clear that they a robust financial plan in place. They left all their wealth to Harry. This helped him secure his school supplies and daily needs throughout the years.

Unforeseen events can strike at any moment. It is important to save up for your retirement as soon as possible. Moreover, you must create a will that ensures the list of beneficiaries on all of your savings and investment accounts.


Harry not only benefits from his parents’ wealth, but also reap the rewards of compound interest. His money was untouched for eleven years. When he opened his vault for the first time at the Gringotts Wizarding Bank, he discovered the amount of gold and money that was in his vault. Despite having this wealth, he did not lead a lavish lifestyle.

Like Harry, you may benefit from compound interest by leaving your money untouched for years in a bank or by investing your money for the long haul.


As I said above, he did not lead a lavish lifestyle. Harry was humble. In fact, he wore the same glasses for seven years. He appreciates what he has and exemplifies this trait the most in the first book. When Hagrid gifts him Hedwig the owl, he was amazed and accepted it wholeheartedly. He was also very grateful when he was gifted the Nimbus 2000 by Professor McGonagall.

In our world, it is easy to be caught by all the sale items and designer brands. However, you must remember to strike a balance between your needs and wants. Appreciate what you have and live within a realistic budget that you set.


Harry’s immense fortune was stored in the Gringotts Wizarding Bank, located in the heart of London. The bank is operated and guarded by goblins. These goblins serve as the gatekeepers to the underground vaults. It is often described as the safest place in the Wizarding World.

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While you cannot keep your wealth within the protection of magical spells and goblins, you can secure your money in other ways. Firstly, you may set up an auto-deposit scheme to send a portion of each paycheck to your savings account. Secondly, you may store your emergency fund in a place where you will not be tempted to spend it frivolously. For instance, you may set up a different account exclusively for that. Lastly, secure your online banking apps through Two-Factor Authentication.

Sources: 1, 2, & 3