Buying an Extended Car Warranty- Understanding Your Policy
According to Forbes, in the first quarter of 2012, the average new car cost an estimated $30,303. To most Americans, this is one pretty penny. And with such an investment of your resources, wouldn’t it be a good idea to keep it protected? A word that is thrown around a lot in the automotive industry is the term: extended car warranty. If you were to ask almost any new car buyer if they have an extended car warranty, they will most likely answer “yes”. This is because the term has numerous vague meanings that people associate with it.
How to Buy a Car Warranty:
- Locate Providers– Picking an auto warranty company can be tough due to so many options. Make sure to choose a provider that is properly accredited, is in good financial standing and is recommended in the industry.
- Compare Prices– Buying the cheapest car warranty isn’t the smartest move, oftentimes these warranties will not pay out any actual claims. Compare prices but understand that if the price is too good to be true, it probably is.
- Go Over Coverage Options- Depending on how much coverage your vehicle needs, you may want to ask what the car actually qualifies for. You can never have too much coverage and this will ensure you’re getting the best policy you can.
- Set Up a Payment Plan– Your coverage should be affordable for you, which is why most drivers use a payment plan for the purchase price of their warranty. Companies that do not offer payment plans should be avoided at all cost.
- Pick Your Deductible– Similar to your auto insurance, a car warranty will have a deductible. This is the amount a driver will be liable to pay when a repair is made. Some vehicles qualify for no deductible but typically most policies have a deductible of $100 or less.
- Purchase Your Policy– Once you have chosen your coverage, set up your payment plan, and chosen your deductible, all that there is left to do is purchase the policy. Ensure there are no additional added fees to your purchase price and it never hurts to ask if there are any discounts available to you.
What Are the Different Types of Warranties?
There are various forms of protection for your vehicle, but the best way to distinguish one from another is to examine each one’s key components. To be safe and ensure you know exactly what form of coverage you have, listed below are a few terms that can be commonly referred to as an extended car warranty.
Manufacturer’s– This is the warranty on your new vehicle in which the manufacturer states to repair your vehicle for a specified period of time and/or mileage. These are typically instated for 3-years/36,000-miles but can vary among manufacturers. These warranties are generally not all-inclusive; review your warranty agreement for coverage details and specifics.
Product– This type of warranty only covers a specific product and any other parts that are in direct contact with it. For example, brake pads may come with a 90-day warranty stating that they will not fail, but this warranty could not extend its claims by stating that the car’s tires will not fail.
Vehicle Service Contract– These contracts are purchased by consumers to cover the costs associated with expensive repairs. Just like the Manufacturer’s Warranty, it covers parts, labor, and sales tax for specific repairs based on coverage. With countless providers promising the world on a string, it is best to find one with an established reputation.
Auto– This is actually an incorrect term that most commonly refers to a vehicle service contract. This term is also known as a/an: Vehicle Service Agreement, Extended Service Agreement, and Extended Warranty. Whereas a Vehicle Service contract will pay for your vehicle’s repairs based on contract agreements, a warranty must come from the manufacturer, demonstrating the term’s inaccurate label.
The term extended car warranty is almost a deceptive term in general, seeing as for it to be true the manufacturer would have to be the one extending it. Many dealerships sell these “extended warranties”, however, they are merely the same contracts that you can purchase from a third-party provider.
When looking to extend your warranty (in reality extending coverage for your vehicle), make sure that you examine your policy closely. Read your contract and ensure that the coverage is the right coverage for you and that your needs are fully protected.
About Endurance Warranty:
Endurance Vehicle Protection is the nation’s premier provider of extended vehicle coverage. By administering our very own Endurance coverage plans, we are able to “cut out” the middleman and pass along these savings onto our valued customers. This also means that throughout the entire life span of your policy with us, you will be dealing directly with us and not a third-party company. We believe in empowering confidence for the road ahead but we also believe in empowering consumers to buy with confidence.
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Alex has worked in the automotive service industry for over 20 years. After graduating from one of the country’s top technical schools, he worked as a technician achieving a Master Technician certification. He also has experience as a service advisor and service manager. Read more about Alex.