These days car owners are keeping their vehicles for longer periods of time, making extended car warranties both appealing and popular with drivers. These warranties can save you time and money as your car ages, provided you purchase the right one. No two auto warranties are alike, so it’s important you know what you need and understand everything that is being covered. Otherwise, you could end up paying for coverage you don’t need, causing you to spend when you shouldn’t have to. We will tell you the questions you need to ask and what you need to do before buying an extended car warranty. This information will help you make an informed and educated decision about buying an extended car warranty and puts you where you belong: in the driver’s seat
There are several questions you should ask before buying additional coverage, which include:
•Do I Need an Extended Warranty? This is the most important question. If you buy a new car and the dealers warranty is for 5 years/50,000 miles extra coverage is necessary if you plan on keeping the car past the original policy. If you are going to have the car for 6 years or more it makes sense to have protection in place in case of problems. Also, if you are buying a used car with no warranty extended warranties can really help cut down on expenses, as older cars tend to need more upkeep.
•What Is Covered? There can be a lot of fine print on these policies so it is important to get in writing what is covered and what is not. Many policies have exclusions on certain parts or services, so this information is vital. For instance, if a policy is a “breakdown” policy it will not pay for repairs on parts that fail due to “wear and tear”, limiting coverage. That’s why is crucial to understand the terminology, as what may seem like minor differences can be major issues for you. If you buy a car with ABS brakes and they are not included that could be a major cost if your car has a history of problems with it’s brakes Also, new cars have a lot of sensors, which may not be included in the extended warranty, so ask for an “exclusion list”, which any warranty company can and will provide if their legitimate.
•What Kind of Deductible Comes With The Policy? Every vehicle warranty purchased is different so find out if your policy goes per visit or per repair. A policy that requires you to pay a deductible per repair can end up becoming very expensive if you need to fix several issues. Also, some less than reputable auto shops may feel it necessary to “find” multiple problems with this type of coverage. To demonstrate, lets say you take your car into the shop and need your alternator, brakes and fuel pump fixed. If you have a $200 deductible the per visit warranty will cost you $200 while the per repair warranty will have you paying $600 ($200 per repair). So it will cost you less and makes more sense to choose a warranty that is per visit, so you pay one deductible no matter how many repairs need to be made.
•Who Is Offering The Warranty? Knowing who is offering the warranty is another important element when choosing to extend coverage. Some extended warranties come from the vehicle manufacturer, while others come from 3rd-party companies. Manufacturer’s warranties can cost more and some have more limitations, but they are generally more reliable than those form a 3rd-party. Many 3rd-party warranty companies will give you sub-par parts that tend to break down or not honor the coverage you are paying for. If you choose a warranty from one of these places do your homework and have them thoroughly checked out first. We recommend sticking with the manufacturer’s warranty to ensure you get what you pay for.
•Can You Transfer The Warranty? Some extended warranties can be transferred between vehicle owners while others expire the minute the car is sold. Check to see if your warranty is transferable, as it adds value to the car. Also, the warranty may not be worth it if there’s a chance you may need to sell and can’t switch the coverage over.
•How Are Claims Paid Out? There are two ways deductibles ca be paid: either the warranty company pays the repair shop directly, or you pay for repairs and then the company reimburses you. If you do not want to pay out of pocket or know you won’t be able to afford costly repairs upfront then get a warranty that pays directly. Otherwise, you could be waiting a while for your money. Also, it is the more practice for the auto shop to be paid directly and any good warranty company will pay claims this way.
•Where Are Repairs Done? This is another valuable question. Some warranties require you to do repairs at certain shops or the dealership, while others will let you go to any auto shop. Be skeptical of a warranty that sets limits on where you can go to get your car fixed, as it will not help you when you need it to. If you are out-of-state and your car breaks down you want to know you are covered and you won’t be if you must perform repairs at a particular shop. This means you would either have to pay yourself for the repairs or pay to have the car towed to the approved mechanic if that’s possible. Not only is that expensive, but it’s a hassle you don’t need.
Now that you know what your policy should and shouldn’t cover you need to know what you should do before and after purchasing the additional coverage:
•Get An Inspection: Before you sign on the dotted line have your car thoroughly checked by a reputable mechanic you trust. This gives you proof of the condition of your car, so there is clear proof later on if the company claims there was a pre-exiting condition. Think of it as your own personal insurance policy.
•Perform Maintenance Regularly: Get your car inspected, the oil changed and do regular tune-ups as recommended so claims aren’t denied due lack of proper care or neglect on your part.
•Keep a Copy of The Policy On Hand: Keep a copy in your car or on you at all times so your prepared if something happens.