Extended Warranty: Do I Need One?

You just bought a new car;it’s perfect and runs like a dream. And it always will, right?
What Is an Extended Service Protection Plan?
Why Do I Need One?
Comes with Additional Benefits
Covers Items Most Warranties Don’t Include
Avoids Haggling
Increases Resale Value
When Should I Buy It?
Where Can I Get the Repairs Done?
Why Can’t I Buy It from a Dealer?
What Should I Look for When Buying an Extended Service Protection Plan?

• • You should consider purchasing “exclusionary” rather than “inclusionary” policies. It’s just as important to know what is not covered. Exclusionary coverage is usually what you get with your original manufacturer’s warranty.
  • You should always see a contract before you pay anything. Avoid buying extended service protection over the phone. If a company will not show the contract prior to purchase, they have something to hide.
  • Don’t be strong-armed into buying a plan. If someone threatens to put you on a blacklist of any kind that would prevent you from being able to purchase a policy in the future, it’s a scam. There is no such list. Look elsewhere to purchase your plan.
  • You shouldn’t have to haggle over the price. The cost should be standard depending on your vehicle’s model and make and the type of coverage you want to purchase. Be aware of false promises and gimmicks.
  • If the price sounds too good to be true, it is! If the price is too low, something is missing. Shop around to find different price quotes so you can determine a range.
  • Read the fine print. If the plan only covers labor charges of $70/hour and your mechanic charges $80/hour, you will have to cover the difference out of pocket.
  • Ask about the cancellation policy. Some will fully refund your money if you change your mind within thirty days and others have stiff fines for cancellations.
  • Do the research on your company. Check the Better Business Bureau, find out their credit score, and see who they are partnered with. Be wary if they have changed their name or are younger than five years old. If you have never heard of the company and they have no solid partners, do not purchase a warranty from that company.
  • If your vehicle has specialized systems, on board diagnostics, GPS and navigation services, ask how they are covered.
  • Make sure your coverage includes “wear and tear” and “complete seals and gaskets” coverage.

Maybe it will, but what if it doesn’t?

Every new car comes with a warranty that is guaranteed by the manufacturer, but these warranties expire and there’s a chance you might need an expensive repair once it does. If you plan on keeping your car longer than a few years, you might want to consider purchasing an extended service protection plan, commonly referred to as an extended warranty.

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After the manufacturer’s warranty expires on your vehicle, you have nothing to protect yourself from expensive vehicle repairs. Extended service protection typically covers parts, labor, and sales tax (if applicable) required for replacement or repair of covered parts in your vehicle.

Let’s face it; cars break down. Besides your home, your car is the second most expensive item that you use on a daily basis. You wouldn’t buy a home without good protection, so why would you leave your car unprotected? An extended service plan will insure that your vehicle is always in the best mechanical condition and can help you avoid expensive repair bills.

Here are more reasons why you might want to consider purchasing extended coverage.

Although the main advantage of attaining a car warranty is to avoid the high cost of automobile repairs, many plans also come with additional benefits that cover much more than the manufacturer’s warranty. Benefits may include 24/7 roadside assistance, towing benefits, lost key/lock out services, trip interruption benefits, and rental car coverage.

By law, emissions and safety equipment (air bags, seatbelts) are well covered under standard new car warranties, but other services and repairs vary greatly between brands. When thinking about purchasing additional coverage for your vehicle, you should consider your driving habits and where you live. If you have a long commute or drive all the time, you will get to that maximum mileage protected by your warranty rather quickly. If you live in an area with extreme temperatures or near the ocean, rust accumulation can lead to all sorts of problems that a standard new car warranty won’t typically cover.

For the most part, extended warranties offer three coverage levels. The first level covers the powertrain. The second level covers the powertrain and more components. The highest level provides comprehensive (bumper-to-bumper) coverage, which includes costly electrical systems repairs.

One of the main reasons to purchase a car warranty is to avoid the hassle and haggling that is common between mechanics and consumers. When you enter in a vehicle service agreement, you now have a claims department team that will deal directly with the repair shop. Ideally, you’ll want a warranty that pays the dealership directly with a corporate credit card so all you will have to do is pay your deductible;if you have one.

Most extended service protection plans are fully transferable and can increase the resale value of your vehicle.

Extended service protection plans cost less the earlier you buy them. The cost for a good plan rises as your vehicle ages and accrues mileage.

If you buy the protection while still under your vehicle’s original warranty, the provider will take that into consideration when calculating the cost. Since your car is less of a risk to protect while still under the original warranty, you will receive a much lower rate than if you had waited until the original warranty expired.

Most plans from reputable companies are customizable. They allow you to choose the repair location. You can go to your favorite mechanic, the original dealer, or any national chain that performs vehicle repairs, such as Pep Boys, Goodyear, or Firestone.

You can buy a warranty through your car dealer, but expect to pay as much as 50 percent more for the same coverage. Check with your dealer first and then compare quotes!

In the end, an extended service protection plan offers you peace of mind. And isn’t that worth its weight in gold?

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Original Article Post: http://repairpal.com/extended-warranty-do-i-need-one

Auto Warranty Tips

Auto Warranty Tips

Understanding Extended Warranties

Finding Coverage That’s Right For You
By Warren Clarke, Automotive Content Editor – Edmunds.com

You’ve seen it happen time and again.

A new business launches with a prosperous bang and high expectations, only to collapse mere months later with a bankrupt whimper.

A marriage begins with intimate glances and fervent I love yous, but quickly devolves into icy glares and loud, angry talk of divorce.

Clearly, situations that start out swimmingly can sometimes end in an unfortunate, premature way. But that doesn’t have to be the case when it comes to the relationship between you and your car; there’s an auto warranty designed to help that situation live up to your expectations. It’s called an extended warranty, and it can help make sure that your car doesn’t degenerate from prized possession to cumbersome money pit.

In essence, an extended warranty is an insurance policy on your vehicle, a safeguard against expensive, unforeseen repairs. The term extended warranty is actually a misnomer, since, in the strictest sense of the word, these aren’t warranties at all. Like auto warranties, they cover repairs and/or regular maintenance for an agreed-upon period of time. True warranties, though, are included in the price of the product; extended auto warranties are really service contracts, since they cost extra and are sold separately.

An extended warranty may be purchased at the time you buy your vehicle; it’s also possible to purchase one much further along in your ownership experience. If you’re the type who likes to be prepared for all eventualities, an extended auto warranty may be just what you’re looking for. Bearing in mind the ever-increasing cost of vehicle repairs, these service contracts can make a lot of sense.

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In deciding whether an extended warranty is right for you, and in selecting the best plan for your needs, you’ll need to ask yourself the following questions:

• To what extent is your vehicle already under warranty, and is this coverage in sync with how long you anticipate owning it? If the car you’ve just bought is new, take a close look at its factory warranty before making an extended warranty decision. If, for example, the vehicle has a factory warranty of three years or 36,000 miles, and you plan on keeping it for two or three years — with an anticipated annual mileage of about 10,000 — then an extended warranty makes little sense, since you’ll likely be covered under the manufacturer’s plan. However, if you plan on keeping the car long after the factory warranty expires, an extended auto warranty is worth considering. If the car you’ve just purchased is used, you’ll need to ascertain if there is warranty coverage from the dealership (coverage periods may range from as little as a month to up to a year, or more). If you’re buying a late-model used vehicle, it’s possible that the vehicle’s original factory warranty is still in effect (this will be dependent on how many miles the car has under its tires, and on how much time has passed since it was originally titled). Some manufacturers also offer “certified used” programs that extend original factory warranty terms on pre-owned vehicles. If the car isn’t under warranty, or if you plan on keeping it past its warranty’s expiration, an extended warranty makes sense.
• What’s the reliability record of the model you’re purchasing? Take a look at the reliability history of the model you’re buying. Though this is by no means a fail-safe way of predicting what your repair bill will look like, it does give you an idea of what you may be in for service-wise; bear this information in mind when making a warranty decision.
• Who is behind the warranty that you’re considering? An extended auto warranty may be backed by an independent warranty company (these are known as aftermarket warranties) or by the covered vehicle’s manufacturer. Knowing who will be underwriting your policy can give you insight into the strengths and weaknesses of the contract you’re considering. Manufacturer-backed warranties score very highly when it comes to ease of use. However, aftermarket warranties are often cheaper. (If you opt to purchase an aftermarket warranty, take a look at how the company’s financial strength has been rated by A.M. Best and/or Standard & Poor’s; this will give you an indication as to its ability to pay your claim. Your safest bet is to choose a company that has a minimum “A” rating with Standard & Poor’s, and/or a minimum “A” or “A-” rating with A.M. Best.)
• What’s the nature of its deductible? Fully investigate a policy’s deductible before signing on the dotted line. Consider not only its amount, but also whether it’s per visit or per repair. With a per visit deductible, each visit to the shop will run you a fixed amount, regardless of how many parts are repaired; a per repair deductible applies to each serviced part. What sounds like a minor difference may, under certain circumstances, have a major impact on your wallet. If, for example, you’ve got a $100 per repair deductible and you take your car in to get the air conditioner, fuel pump and alternator serviced, you’ll be out $300; had you opted for a per visit deductible, those repairs would only have cost you $100. Charier still is a $0 deductible policy. You will have to pay extra for this, but if your circumstances become such that you have to take your car in frequently, you’ll find that this policy more than pays for itself.
• Is the warranty transferable? Some extended warranties end when the person who bought the warranty sells the car. A warranty that allows you to transfer it to a new buyer is preferable; it’s an excellent selling point for prospective buyers.
• Can repairs be performed at any repair shop? Some extended auto warranties stipulate that repairs must be performed at the dealership from which the warranty was purchased; this can prove limiting and inconvenient. It’s best to opt for a warranty that, at the very least, gives you more than one service facility to choose from. You’ll appreciate this should the vehicle ever need service while you’re on a road trip, miles away from home.
• What exactly is covered? Know what’s covered — and what’s not covered — by the extended warranty you’re considering. Does the service contract cover breakdown as well as wear and tear? Under a “breakdown” warranty, coverage is extended only to parts that break. Such a policy can prove less inclusive than is desirable, since not all parts fail due to breakage. Some need to be replaced because they’ve worn down over a period of time; a “wear-and-tear” warranty extends coverage to worn-down parts in need of replacement. Additionally, some “entry level” contracts don’t cover ABS brakes, so if your vehicle has this feature, you should consider upgrading to this level. And overheating — regardless of its cause — isn’t covered in many warranties. Thus, if overheating occurred due to problems with an expensive part such as your radiator, you’d be stuck with a hefty repair bill. Before committing to a warranty, take the time to fully explore the ins and outs of its coverage implications. The distinctions between the various plans might seem slight, but they can prove quite important.
• Is a cash layout required for repairs? Some extended warranties require that you pay the bill, then send the receipt in and wait for reimbursement; in many cases, months elapse before you get your money back. Ideally, you’ll want a warranty that pays the dealership directly with a credit card.

Remember to compare all your options before making a warranty decision. Utilize the Internet; many companies sell directly online, and, at the very least, getting quotes from them can help give you a ballpark idea of what an extended warranty with your desired features should cost. In warranty buying, as in so many other aspects of life, it helps to be fully informed.

Article From: Edmunds.com

http://www.edmunds.com/advice/warranties/articles/47681/article.html

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