May 29, 2013 - by
Just like most sectors of the automotive industry, auto warranties can be somewhat confusing. But they don’t have to be and you won’t have to be an expert as long as you’ve got this Auto Warranty FAQ by your side!
What is an Extended Auto Warranty?
An extended auto warranty is actually properly called a vehicle service contract. The reason it is not referred to as a “warranty” is because a product’s warranty can only be placed upon the product by the manufacturer. While the manufacturer (Ford, Chevy, Honda, etc) will place a manufacturer’s warranty on the vehicle when it is new, very few (if any) provide extended coverage for their vehicles once the original warranty has run out. But third-party providers can protect your vehicle exactly like your manufacturer’s auto warranty did, making car repairs affordable again for countless drivers.
How is an Extended Auto Warranty Different from Auto Insurance?
While an extended auto warranty works in a similar way to auto insurance, these two products are very different. While auto insurance (commonly known as collision insurance) protects your vehicle if you are ever in an accident, you’re the one left liable if your car ever breaks down. This is where an extended auto warranty comes in. When your car experiences a mechanical or electrical breakdown, the auto warranty pays for covered repairs!
When and Where Can I Purchase an Extended Auto Warranty?
One of the great things about an extended warranty is that it can be placed upon your car at almost any time, new or used. With car warranty companies offering a wide variety of coverage plans, coverage can be placed upon your car at almost any time. Remember though, some companies have age or mileage restrictions for different coverage levels.
There are many companies online that offer extended auto warranties. In fact, a few top-rated ones we have listed on this site for your convenience. Extended car warranties can also be purchased from dealerships, however, be aware of interest or marked up prices these dealers may charge.
Does My Car Qualify for an Extended Car Warranty?
This question is a bit difficult to answer, because we unfortunately do not know what kind of car you drive. You will have to fill out an application form for yourself to see if your car qualifies. The good thing is, most autos will qualify for coverage. But remember the three main criteria for extended coverage are: make/model, age, and mileage of the vehicle.
What is Covered by a Typical Extended Auto Warranty?
There are 4 basic levels of coverage. While every company or administrator will have a different name for their policies they all share the same basic components.
Power Train– This coverage is known as “basic” coverage and pays for the most important AND most expensive components in the event of a mechanical or electrical breakdown. These components include: the drive axle, alternator, transmission, and engine.
Stated Component– This coverage level is most often referred to as “standard” coverage. In these policies the auto warranty company will “state” the “components” that are covered by the policy, hence the term: stated component. Remember, if it isn’t stated in your policy, it isn’t covered.
Exclusionary– This level of coverage is often given the name “full-coverage” or “bumper-to-bumper” because it covers almost everything. Because this form of coverage covers SO many things, it is easier to list what IS NOT covered rather than what IS covered. These are called “exclusions” which is why we call this coverage “exclusionary”.
WRAP– The wrap coverage is pretty unique compared to the other levels of coverage. Oftentimes, a manufacturer’s warranty will have a power train warranty that is separate from its original warranty. This power train warranty is most times longer than the original warranty causing people to not have a need to add extended protection. The WRAP coverage comes in to take care of all the other components not included in the power train warranty. This coverage “wraps” up all the other pieces of your vehicle, leaving you fully protected.
How do I Buy an Extended Car Warranty?
Most companies will offer to sell you an auto warranty after some sort of qualification process. Once your vehicle meets the auto warranty company’s requirements, you can purchase your extended auto warranty at any time. Many companies offer affordable monthly payment plans so you keep your car protected without having to unload the entire price of the policy at once.
Is There a Deductible for an Extended Auto Warranty?
When it comes to deductibles, the answer is: yes and no. While many extended car warranty policies come with a deductible similar to your collision insurance policy, not all of them do. But instead of charging an arm and a leg like insurance companies, most extended auto warranties have deductibles of $100 or less! It all depends on what policy you choose.