August 14, 2013 - by
Buying an extended car warranty, also known as a vehicle service contract, from a quality provider is an important step in protecting the investment you have made in your automobile. With a recent J.D. Power study* reveling that 61.6 percent of vehicles three years or older have had repair work required, it makes sense to cover your automobile if you plan to keep it after the original manufacturer’s coverage lapses.
The cost of diagnosing/repairing today’s highly technical automobiles continues to increase, making a case for extended coverage even more relevant. With so many different vehicle service contracts out there, however, just as important as obtaining coverage is getting the “right” coverage. Here are some extended auto warranty tips to help with the process.
- Find a reliable company. Search for a top-quality extended warranty provider. This includes checking out the Better Business Bureau rating of any prospective provider and researching some of the consumer reviews that have been written about them. This information can easily be found online.
- Choose the best coverage plan. Don’t opt for the least expensive coverage plan. Most companies offer a variety of plans, including bumper-to-bumper (exclusionary) and stated component (inclusionary) coverage. You may also find powertrain coverage policies that are specific to the engine, transmission and drive axles. Exclusionary policies cover all items except those noted under “exclusions.” Inclusionary policies, on the other hand, cover only those items specifically included in the policy document. Resist the temptation to choose the cheapest coverage. You will find these are generally substandard in quality. You want the coverage that applies to most parts of your vehicle. Also, consider the amount of the deductible, which should be an amount that you are able to comfortably absorb in the event your car requires repairs. Make sure the deductible is charged “per-visit” and not “per-repair,” which could have you paying for each component repaired or replaced.
- Understand where repairs can be completed. Some warranty policies require that your car be repaired at specific shops or dealerships outlined in the contract. This is not a good sign. Quality extended auto warranty companies will allow you to take your vehicle to any ASE licensed/certified repair facility of your choice. There are more than 350,000 certified mechanics in the US, so you will definitely have a big list of repair shops in your area to choose from.
- Perform regular maintenance. Some warranty providers may deny a claim if regular maintenance has not been provided for the covered vehicle. Perform all manufacturer-recommended routine maintenance and keep receipts as proof. Oil change is the most common and important part of the routine maintenance.
- Carefully read the contract. Read and understand the paperwork before signing, especially cancellation policies and exclusions. Most drivers are required to drive at least 1,000 miles in order for the contract to be activated. Some coverage providers have a 30-day waiting period before the policy holder can file claim. Remember, a quality extended warranty company should go over all these details with you over the phone on the day the contract is activated. Also, it is a good idea to carry a copy in your vehicle just in case you ever have to use it.