Extended Warranty/Service
Contracts
Despite what you
might have read, Extended Warranties or Vehicle Service Contracts,
as they are actually known, are a good idea. Even the best
cars break down and when they do, they are very expensive
to repair. (They can be placed on both new and used cars
or trucks)
What is an Extended
Warranty/Service Contract?
- A contract purchased to
protect a vehicle against the unexpected costs of breakdowns,
for a specific period of time.
- Allows repairs to be made
in accordance with the level of coverage you purchase.
- Ensures your vehicle is
always in the best mechanical condition.
Why purchase an Extended Warranty/Service Contract?
- Peace of mind
- Allows repairs to be made
when you need them
- Most include a Free Rental
Car if your car is in the shop for covered repairs
- Protects you against the
rising costs of repairs
- Added resale value- most
contracts are transferable upon sale
What doesn’t make sense is to pay the dealer a huge profit
for simply printing the contract. For example a 6 year / 100,000
mile service contract on a typical midsize sedan might cost
the dealer about $800, but they turn around and sell it to
the consumer for $1200! A lot of dealerships are setting up
their own warranty companies. So when your car does need a
repair, guess who has to approve the claim - THE DEALER! Don’t
buy a warranty or service contract from the dealer.
We recommend WarrantyDirect.com . They offer service contracts to meet your
driving habits. These contracts are honored at the repair
facility of your choice and could end up saving you a lot
of money in unexpected repair bills.
WarrantyDirect.com
Warranty Direct satisfies my warranty checklist above, and
are 60% less than dealer prices. You get Car Rental, Towing,
Road Service, Travel Expenses, Lost Key Lockout, all covered
during your car's standard warranty. They have one deductible
per visit, or $0 deductibles. They cover parts that break,
AND Wear & Tear. Most other warranties only cover parts
that break. You can get a warranty for a used car up to 60,000
miles. They pay repair shops directly so you don't have to
put up cash. Their ability to pay claims is "A"
rated by A.M. Best. If you don't buy your warranty from them,
you're a fool if you don't get a quote BEFORE going to a dealer
to compare. I only recommend a $0 deductible. They frequently
run specials so Check their site often.
What to look
for when purchasing an Extended Warranty
- True Bumper-to-Bumper
Coverage- if the plan lists the items that are covered,
it is Not a bumper-to-bumper plan. By definition, a bumper
to bumper plan is exclusionary, that is, it will only
list the few components that are not covered. Typically
these include cosmetic and maintenance items.
- Wear and Tear Protection-
This means that you are covered for parts that break as
well as those that wear out. All covered parts in a policy
should include a “wear and tear” provision.
A lot of plans have wear and tear exclusions, such as
struts, piston rings, valves or other expensive components
that wear out and will not be covered. Beware of “Mechanical
Breakdown” plans, they often have wear-and-tear exclusions,
thus offering you less coverage.
- Overheating- Look for
a plan that does not exclude damage due to overheating.
- Roadside Assistance- You
want a plan that offers a Free nationwide Roadside Assistance
plan. You want to be covered per occurrence. Not an out
of pocket reimbursement plan, that is tied to only covered
repairs. A good policy includes:
- Emergency Road Service*
Towing * Mechanical First Aid * Emergency Tire Service
* Battery Assistance * Gasoline Delivery * Fluid Delivery
* Emergency Lock-out Service * Nationwide Coverage * Toll
Free 800 Number * 24 Hours a Day/365 Days a Year
- Car Rental - Should your
vehicle have to remain overnight for a covered repair.
- Trip Interruption - Should
your vehicle become disabled more than 100 miles away
from home and the repair is covered under your contract,
reimbursement for lodging and meals.
- Nationwide Protection
- Repairs can be made at any repair facility in the US
or Canada.
- Choice of Deductibles-
Most automobile plans offer $0, $50 and $100 deductible
options.
- Renewals - A plan that
may be renewed for continuous one-year terms for as long
as you own your vehicle.
- Transferable - The ability
to transfer your coverage when you sell your vehicle,
for a modest fee, which will increase your vehicle’s
resale value.
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