Published on : 09 September 20196 min reading time
It is an accord with the warranty company made by the car owner in order to cover the maintenance for a specific duration. This helps in keeping up the unpredicted expenses incurred due to the automotive repairs. It would cost much more than the cost of the warranty at times, if your vehicle has something major repairs. It is mandatory to clearly understand the terms of warranty the as a customer. We also need to understand the needs of the warranty industry. There will be differences in the level of coverage offered by different companies in the market. But it is common for every company has its hidden terminologies to regulate the coverage.
2. What actually does an extended warranty cover?
Consumer need to have complete knowledge of what is covered and what is not covered under extended warranty.There are 2 main categories to look into whether it has “breakdown” warranty coverage or “wear-and-tear” warranty coverage.A “breakdown” warranty provides coverage for the parts that break however not all parts fail due to breakage, some of them needs to replaced as they have worn out with time. “Wear-and-Tear” warranty provides coverage for the worn-down parts. Another major point to consider is , warranty should provide coverage for TSB. Car manufacture occasionally notify the consumer regarding a condition on vehicle that may exists and which requires immediate attention. That notification is called A Technical Service Bulletin (TSB) or Factory Service Bulletin. So make sure your extended warranty provides coverage for such TSB. In addition to above factors, also keep in mind that it should have coverage for ABS brakes and coverage for damage due to overheating, as overheating can lead to major part replacement such as radiator. So a consumer should consider all the above factors and pros and cons of each warranty before purchasing an extended auto warranty.
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. Do I need to buy an extended warranty when the vehicle is covered by the manufacturer?
As your vehicle covers many miles and becomes older, the price for an extended auto warranty will automatically go up as do the repair expenses which are normally the case for an older, out-of-warranty vehicle. You are only purchasing total mileage coverage, and not extra mileage to your current total. Hence you have nothing to lose here but only gain. Taking advantage of your new vehicle and low mileage is the most prudent approach as you plan for unavoidable repair costs in future. An extended auto warranty will provide you with peace-of-mind protection in case of such unexpected expenses. Some are transferable, allowing for enhanced resale cost of the vehicle.
5. What is a deductible?
Consumer should consider not only the amount but also whether he has been charged per visit or per repair. Per Visit is the cost deductible as per your visit to the shop whereas a per-repair deductible applies to each serviced part. For example, 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 have to pay $300.00. IF you have opted for a per visit deductible, those repairs would only cost you $100.00. There are certain policies which have $0.00 deductibles, however consumer has to pay extra.
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. If the manufacturer’s warranty for my vehicle has expired, can I still obtain extended auto warranty coverage?
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 top warranty companies work like this: Assuming your vehicle breaks down or is in urgent need of a repair, take it or have it towed to any licensed repair facility and present your service agreement to the Service Department. After they have studied the problem with the vehicle, they will call the claims administrator toll-free and receive repair authorization from him for all your covered repairs minus a deductible wherever applicable. All claims are then paid directly to the repair facility of your choice with a corporate credit card; therefore, you need not pay for your repair and wait for the reimbursement.
9. How do I get an instant quote for rates?
Make sure the warranty company has a good financial consistency and their record on paying for claims Warranty Direct is one recommended by most among all the warranty companies Their history starts 25 year back with over 2 million signed contracts. Asset value is about $165 million. The claims worth $500 million have been paid. They are reinsured by an ‘A’ rated A.M. The company is worth $2 billion in assets and a best insurance company in the market.