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Extended Warranty
Make life easier by not having the aggravation of paying high costs for your auto repairs.
An extended warranty is an agreement between the car owner and warranty company, obligating the warranty company to pay for repairs covered by the contract for a specific period of time. With an extended warranty you are protecting yourself from the unexpected cost of mechanical breakdowns. One major repair often ends up costing as much, or even more than the entire cost of the warranty. As a consumer, you can only accurately understand the coverage if you learn the terminology and standard industry requirements. The levels of coverage offered differ considerably from company to company.
There are many reasons to purchase an extended warranty
Your vehicle is one of your biggest investments. An extended warranty will ensure it is always in the best mechanical condition. With the complexity of today's vehicles, one major repair often costs more than the extended warranty.
Your warranty is less expensive the earlier you purchase it
As the vehicle ages and accrues mileage, the price for protection rises. Prices may also rise due to increasing labor and parts prices. Like life insurance, the earlier you buy your warranty, the less expensive it will be. Warranties are not duplicate coverage, they merely extend the short warranty the manufacturer provides.
Is a cash layout required for repairs?
Some warranties require that you pay the bill, then send the receipt in and wait for reimbursement; in many cases, months elapse before you get your money back. Ideally, you'll want a warranty that pays the service repair facility directly with a credit card.
Warranty Term
Some warranties have terms that start from the original in-service date (the original purchase date) of your car. This is a sales tactic that companies use to make the contracts appear to have a longer coverage term. If you purchase a warranty that begins the day you buy it, the date of expiration will be clearly defined. In addition, you should check the contract to see if there is a waiting period before you can use your extended warranty. Some companies have waiting periods as long as 30-60 days.
Know what's covered -- and what's not covered
Does the contract cover breakdown as well as wear and tear? Under a "breakdown" warranty, coverage is extended only to parts that break. Not all parts fail due to breakage; some need to be replaced because they've worn down over a period of time. A "wear-and-tear" warranty extends coverage to worn-down parts in need of replacement.
If "wear and tear" is not covered in the contract, then you are probably being offered a "mechanical breakdown" warranty. There are many components in your vehicle such as piston rings and CV joints, that usually wear out instead of breaking, in which case, they would not be covered under a "mechanical breakdown" warranty. A "mechanical breakdown" warranty is less expensive is usually offered on used vehicles, which do not qualify for a true "wear and tear" warranty.
Who's really behind the warranty you're considering?
An extended warranty may be backed by a third-party warranty company or by the vehicle's manufacturer. Knowing who will be administering your policy can give you insight into the strengths and weaknesses of the contract you're considering. Administrators act as claims adjusters, authorizing the payment of claims to the service repair facility under the contract. Manufacturer-backed warranties score very highly when it comes to ease of use. However, third-party warranties are often less expensive and offer broader coverage. If you decide to purchase a third-party warranty, make sure they have the financial resources to meet their obligations under your contract. After all, the ultimate measure of a warranty company is ensuring that your claims are paid quickly and easily.
***If you decide to purchase your extended warranty through a dealership - and the contract is backed by a third-party administrator, make sure the dealer forwards your payment and gives you written confirmation. Some consumers have discovered too late, that the dealer failed to forward their payment, leaving them with no coverage months after signing the contract.
Warranty Direct
Warranty Direct is the direct marketing arm of Interstate National Dealer Services, Inc., one of the nation's largest vehicle warranty and service contract firms. This 23 year old company has been publicly traded and has the experience of well over 1 million contracts sold. When looking at extended warranty companies, financial stability should be of utmost importance; after all, you will need them to be there down the road to pay your claims. Interstate has been named to the Forbes Magazine list of the " Top 200 Small Public Companies in America" THREE times. We feel it's important that you know who you are buying from. They are not an anonymous web site but a warranty firm with an outstanding track record.
Buying a warranty is all about transferring your risk of costly repairs and having your claims paid. You also want to make sure you will not have further out of pocket expenses later. No one does this better than Warranty Direct.
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