Extended Car Warranties Should Be Your Choice For Used Cars
Extended warranties are available for almost anything you buy these days, you can’t even purchase a $30 DVD player from Walmart without the cashier asking you if you want to pay for the extra coverage. Auto dealers are no different, it almost goes with out saying that you will be offered extra peace of mind in the form of an extended warranty when you buy a new or used vehicle. Even if you have had your car for awhile and it is no longer covered by the manufacturer warranty there are companies that will sell you coverage against repairs. The question most people are asking is whether or not this is in fact a necessary expense?
The short answer is that generally you are just throwing away your money, the chances are that you will not need the added insurance against malfunctioning motor vehicle. A more complete answer would be to do extensive research on what is being offered and be sure that you are not the victim of a scam because there are many crooked companies and people out there these days especially in this industry. The first thing to understand is that in the strict legal sense it is not a warranty but in actual fact a service contract so potential clients should make sure with whom they are dealing. The companies providing these contracts have been under deliberate inspection because of unsavory business practices from ranging from pushy, aggressive phone sales to purposely not clearly explaining what repairs are in actual fact covered.
Extended service contact pricing is not regulated so oft times companies will charge whatever the market will bear and in some cases ridiculous commissions of up to 50% go to the sales person and then the company has to pay itself and pay for it’s administrative costs so very little of your money actually goes to repairs. Recent changes to the Service Contract Industry Council’s Model Act should help as it is a template for a law to regulate extended warranties and has already been adopted by more than half of the states.
Generally speaking extended coverage offered by the actual auto makers are fairly legitimate and purchasing them is really a matter of choice, still be aware of exactly what repairs are covered because you will often find that what is covered is quite unlikely to break and you might just be better off buying a vehicle from a manufacturer that has a good track record of making reliable automobiles. The third party service contracts are mainly the one’s that have given this industry a bad name.
When considering purchasing extended coverage take into consideration the following:
*Is the coverage provided by the manufacturer or a third party because dealers will very often sell both types of insurance so understand what you are buying.
*Do research on the company responsible for paying your repair claims and make sure they’ll be around for awhile as there are many fly-by-night companies in this business.
*Read the contract very carefully and make sure you understand exactly what parts are covered, be especially careful if you are going to be installing after-market components or parts.
*Check with the Better Business Bureau, consumer watchdogs or even your state attorney general to see what type of reputation the company has built for themselves.
*Make sure you understand how the claims will be handled, some restrictions include using selected repair facilities, obtaining authorization before the repairs are performed or paying upfront and then seeking reimbursement from the company (be especially careful if this is the case).
*Research the laws of your state, some have laws regarding these contracts while others obviously do not.
*Read the fine print very carefully there is usually a lot of it and often times contracts don’t say too much about what is not covered in the regular print.
*Be aware of any use of the term “wear and tear”, it is a very ambiguous expression that leaves a lot open for interpretation.
In conclusion buying any kind of extended warranty or rather service contract is about purchasing the peace of mind that you will not be shelling out large amounts of cash for repairs once your vehicle gets older and the manufacturers warranty expires. Entering into any contract with your eyes closed is not going to offer you said peace of mind, always understand what you are spending your hard earned money on and be sure that you are getting the required value for your money.