Extended auto warranty information
25 years of experience
2 million car warranty contracts sold
$500,000,000.00 in paid claims.


Extended Warranty
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AUTO WARRANTY


The following was published by a Federal agency several years ago. Consistent with most general advice the agency discourages the purchase of any "extras" like an extended auto warranty. That probably has some value so far as it goes, particularly if the extended auto warranty is being purchased from the selling dealer. Well, times change. You may be shortchanging yourself if you do not investigate the cost-benefit of an extended warranty from a private company like Warranty Direct. The possibility of never paying for another auto repair is attractive. I suppose one way to look at the agency advice is if it is so on target then why de we need lemon laws?
Ah extended auto warranty can often yield substantial profits for the dealers that sell them and the warranty companies that back them.

Many new cars are very reliable, so there are few service claims. Also, many cars now carry long manufacturer warranties, so many service problems are covered by the warranty, maybe leaving little to be covered by the extended automobile wrranty.

If you decide, despite these facts, that you want to purchase one of these auto warranties, check carefully exactly what is covered. Almost all contracts exclude from coverage maintenance and wear items, ranging from brake pads to exhaust system components to air filters. And many car warranty contracts exclude or fail to include-electrical devices like power windows and radios, interior trim, gauges, and even air-conditioning systems. Some auto extended warranties cover the cost of towing and a rental car but others do not. And most contracts require you to pay a "deductible" amount for each repair-in some cases, as much as $100-before the auto warranty contract pays anything.

Check how the repair shop will be paid. Under some contracts, the shop simply bills the auto warranty company; under others, you must pay the shop, then seek reimbursement from the auto warranty company. Even if an auto warranty company says shops can bill it directly, check with repair shops you might use to be sure they will in fact bill the warranty company.

Finally, be sure the auto warranty company is financially sound. Many of these companies have gone out of business in recent years, rendering their extended warranties worthless. You are probably safest with a service contract backed by an auto manufacturer, by a large insurance company, or by a long-established independent auto warranty company.

A key point: if you want an extended auto warranty, you don't have to buy it where you buy your car or where you plan to have it serviced. Before you go to a dealer to purchase a car, check other dealers and independed auto warranty compaies for the prices and coverage of their service contracts. Then you'll be able to use these alternative vendors either to negotiate a good extended warranty contract price from your dealer or to supply you a contract if your dealer won't meet the competition.


 

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