1. What exactly is an Extended Auto Warranty?
An extended warranty could be defined as a written understanding between the car owner and the warranty company, thus extracting a commitment from the warranty company to pay for repairs covered by the agreement for a slated period of time. With an extended auto warranty you are actually protecting yourself in the event of a sudden or unexpected mechanical failure. One major repair frequently results into costing an equal amount, or some times exceeding the cost of the warranty. As a consumer, you can perfectly understand the coverage only when you learn the terminology and standard industry norms. The levels of coverage extended vary considerably from company to company. Most states (36 of them) do not standardize the coverage, and therefore, you may have to learn to read between the lines in order to perfectly understand what is written in the contract.
2. What does an Extended auto warranty Cover?
It is mandatory to know what aspects of maintenance are covered by the warranty company under consideration. You need to check if it covers both depreciation as well as repairs. If it is a breakdown warranty, it only covers the parts that are common to fail and not others. In this case, the warranty will not be attractive because, it will include only parts that have the highest ratio of breakage. Some parts may depreciate during the period of usage. Those have to be covered by wear and tear warranty. Normally, the extended warranty does not cover Technical Service Bulletin (TSB) or Factory Service Bulletin. There are the warnings provided by the manufacturer indicating the possibility of a failure. There might be many defects in the vehicle which needs to be taken care of immediately. These failures are suggested to be analyzed and repaired immediately by the service center. Generally there will be more TSBs issued by the company on a vehicle. These will not be covered by the Warranty agency. This is one of the major excuses the warranty company reject the coverage when produced. Next comes the ABS brakes. It is again pretty common for vehicles to have this failure. In this case, you should improve your coverage level. Overheating, despite its consequences, it also not covered by most of the warranty agencies. At times, overheating might cause one a big money when occurs on a costly part. So precaution must be taken on this as well. It is important for the one to thoroughly understand and investigate the various offers before considering a warranty. Even a small difference in the plans, as it looks have to be taken into account because that might prove significant at a later stage.
3. Do I really need an extended auto warranty?
Each mechanical repair might cost big and these rates are on the climb. So measures should be taken in order to safeguard the investment made on the vehicles. It is always safe to have an extended warranty irrespective of what make/model you hold, which could cover your unexpected repairs on the life of the automobile. No matter what the problem is or when it would occur, an extended warranty can cover it at any future point within the validity of the warranty irrespective of the external causes like rise in price in the market, or increasing surcharges due to massive repair etc. You can benefit from the warranty instead to face these problems on your own.
4. Why should I purchase an extended auto warranty now when my vehicle still enjoys the warranty period that is covered by the manufacturer?
Most logical approach is to capitalize on the vehicle’s newness and low mileage. It provides peace of mind as it covers future repair costs. Also we should keep in mind that the price of extended warranty increases with the vehicle’s age and miles covered . Consumer is buying total mileage coverage, not addition of mileage to your current total.
5. What about the deductible?
You have to thoroughly investigate a policy’s deductible prior to affixing your signature. Pay attention not only to the amount, but also whether it is calculated at per visit or per repair. With a per-visit deductible, every visit to the shop will cost you a fixed amount, irrespective of the number of components repaired; a per-repair deductible applies to each serviced part. What sounds like a negligible difference may, under certain circumstances, may lead to a severe strain on your purse strings. For example, let us assume you’ve got a $100.00 per-repair deductible and you take your car in to get the air conditioner, fuel pump and alternator serviced, you’ll be spending a staggering price of $300.00. Had you opted for a per visit deductible, all those repairs would only have cost you only $100.00. Hence, understand the implication and tread carefully. There are still $0.00 deductible policies. But then, you will have to pay extra for this type of extended auto warranty, but if your circumstances warrant that you have to take your car in more often, you’ll find that this policy is more beneficial.
6. What type of auto warranty should I buy?
There are Couple of types of warranties available.Those are as follows: Powertrain Warranty: This warranty covers the engine, transmission, and other parts of the Drivetrain only, which is defined as the 29 parts of the vehicle through which oil flows. These are the parts least likely to fail. The average vehicle contains thousands of parts. As it does not cover the majority of the components of a vehicle, the Powertrain Warranty is truly not an extended warranty. Bumper-to-Bumper Warranty: This warranty covers almost all of the mechanical systems of the vehicle, from front bumper to back bumper; except for those on the “exclusion list”. It is much easier for a consumer to see a short list of items that are not covered and know that everything else is. Named Component Warranty: Covers the major mechanical systems of the vehicle from mechanical breakdown and mechanical failure. If the part is not listed, it’s not covered by the contract. NOTE: Some companies sell above plans with the name tagged Bumper-to-bumper which can be misleading because it is always an inferior level of coverage. There are certain consumable items, such as brake pads or windshield wipers,these parts are never covered. Extended auto warranty package also offers Roadside assistance and travel reimbursement plans.Some even offer free lodging and meals if your vehicle breaks down on a trip.
7. Can an extended auto warranty be purchased after the initial manufacturer warranty has expired?
Many consumers do not realize that even after the manufacturer’s warranty has expired, they can still opt for extended coverage. You can generally receive coverage on vehicles that have run under100,000 miles on the odometer. A vehicle out of its original warranty is more liable to have mechanical failure as compared to a newer vehicle. For this reason, vehicle inspections are mandatory. A good example in this regard would be life insurance. As you age, can you get a comprehensive life insurance policy without a physical examination and an increased cost?
8. How does the claims process work?
The Warranty process starts when your vehicle breaks down. It is towed to a licensed Service department. The warranty papers are submitted to them. After examining the problem, the service people will call the claims administrator and receive a repair approval. The claim amount is paid directly to the service department. You dont have to pay for the repairs.
9. Where can I get an instant quote for an extended auto warranty for my vehicle?
There are many such companies in the market, you can search for the one that best suits your requirement. One such company is Warranty Direct. Warranty Direct is one of the major Companies to provide Extended auto warranty. They are a 25 year old company that has the experience of nearly 2 million contracts sold, assets in excess of $165 million, has paid over $500 million in claims and they are re insured by an ‘A’ rated A.M. Best insurance company with over $2 billion in assets.