Is an Extended Auto Warranty Plan Right For You?
There is a certain peace of mind that comes from knowing your car is under warranty. You know that you won't have to pay for unexpected repairs. You know that your monthly budget is protected from budget-busting car repairs!
But what happens when your warranty runs out? That's when it can make sense to purchase an extended auto warranty. An extended warranty covers your car for repairs after the original manufacturer's warranty has expired. When you buy an extended warranty plan you are basically buying insurance against costly car repair bills. You can have that peace of mind again, and you can save hundreds and even thousands of dollars!
Before committing to an extended auto warranty plan, take the time to explore the ins and outs of the various coverage options. And you can save hundreds of dollars by comparison shopping and requesting extended auto warranty quotes online. Plans can look similar yet have very different prices, so be sure to read the fine print.
Here's a list of important questions you should consider:
Do you really need an extended warranty plan for your car?
Your vehicle is one of your biggest investments, and an auto repair warranty will ensure it's repaired if anything goes wrong. Did you know that the average major repair is over $2,000? With the complexity of today's vehicles, one major repair can cost more than the cost of the extended warranty.
You are making a bet when you buy any extended warranty. You are betting that the total amount of the warranty payments will be less than the amount you would pay when your car breaks down. Before purchasing an extended auto warranty, think critically about your particular car. Is it a make and model that will run for 150,000 miles just by changing the oil regularly? Then you might not want to pay for an extended auto warranty. But if your car has a tendency to break down, or if you can't afford to make a large lump-sum repair payment, an extended warranty can be a great purchase.
There is no need to buy an extended warranty if you are purchasing a new car and don't plan to own it longer than the manufacturer's original warranty.
When should I buy coverage?
An extended auto warranty is less expensive the earlier you purchase it. As your vehicle ages and accrues mileage, the price for protection rises. The newer your vehicle is, the lower the prices and the longer the terms. The warranty provider usually takes into account the time left on your manufacturer's warranty, if any, and takes over after it expires.
What should I look for in the warranty's coverage?
Be sure the most expensive parts of the car are covered, namely the engine and power train.
How will my claims be handled?
Look for a company that handles all aspects of your claim -- and allows you to use the repair facility of your choice. Don't get locked in to going to their preferred provider, who may not be the best option for you.
The warranty company should pay the repair facility immediately via corporate credit card. They should cover all parts, labor and even sales tax (if applicable) with no limit on the number of claims you may have, or the parts that may be used for replacement.
Make sure that the company you are considering will pay the full, posted labor rate to the repair facility and not just the hourly rate designated by the repair guides.
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