In recent times, America seems to be financing everything, and as you guessed, you can find companies that will let you finance an extended warranty contract. Sometimes, you will be able to add the cost of the extension into your car loan, but we are going to talk about the companies that allow you to finance the contract price itself.

     By financing, I do not really mean that the company will put you on a multi-year plan with a fixed APR. What I really mean is that there are companies that allow you to pay off the contract price overtime, at a predetermined payment schedule. Obviously, the longer the payment plan, the more you end up paying. You need to do your math here, do not get stuck paying double for a contract because it took you two years to pay it off. Remember that when you purchase a warranty, you are basically paying the average repair cost of your vehicle for a given amount of time, in order to be covered incase of an above average repair bill. If you are going to end up paying double for the contract because you are paying over time, do not bother.

     Scenario. You are purchasing a four year extended auto warranty and elect to pay it over time. Calculated out, it will take you two years to pay it off, and it will end up costing you double. Double! The warranty company will probably sell you on it by saying you can still come out on top, but at this point you might as well save your money in a bank account making some interest. Always calculate how much the contract will end up costing you and most of the time you will realize that if you cannot pay it in full, you are better off waiting until you can. It is rare that the company will double the price if you elect to finance the contract, but it happens. Lately, companies are allowing you to pay over time, without raising the price.

     If you elect to pay the contract off over time, you will most likely need to pay it off monthly for a year, and pay a percentage of the total cost as a down payment. The exact terms of these agreements vary between companies. This sort of payment plan benefits you and is offered in order to boost sales. In today's economy, depending on your credit, you can open a zero percent interest credit card and purchase the warranty on that. There are many companies offering 0% interest for a year or more, so if you buy the warranty, and pay it off in equal monthly payments over the course of the year, you can save yourself a lot of money.

     You should never finance a warranty and end up paying more money for it over time. Many companies will work with you if you tell them you need a payment plan. They all want to make sales, so tell them you need to pay it off over time, and they might let you without raising the prices.