Extended Car Warranties ‐ Avoid the Scams
What is an Extended Car Warranty?
Extended car warranties are a vehicle service contract between the car warranty company and you. They are not car insurance. If you’re planning on keeping your new car for some years, extended car warranties make sense for you. But not all warranty companies are reliable and the current car warranty scams are scaring buyers away.
Buying a New Car Extended Warranty
The best time to get that extended warranty is when you buy a new car. Most dealers offer them, and it is usually an extension of the manufacturer’s warranty. If you think you’ll own the car past the standard warranty period, buying an extended warranty is often a good idea.
In many cases you don’t have to decide on the day you buy the car. As long as you maintain your car, you can purchase the extended warranty any time before the standard warranty expires. But be sure to check with the dealer on their specific terms. In most cases, the longer you wait to purchase the warranty, the more it will cost.
Before you buy the dealer’s warranty though, check online and you might be happy to find that new car extended warranty coverages are available from reputable companies online. And most of these are more affordable and comprehensive than the dealer’s warranty. When you are buying a new car, there are so many things to keep in mind that you may find yourself agreeing to extras without having anything to compare them to. That’s when you’ll be glad you did your research and found a reputable dealership and a good car salesman.
Extended Car Warranty Sellers for Used Cars
Before you fall for a sales pitch designed to make you panic, be sure you thoroughly check out any offers for extended car warranties. There are always phone scams, mail and email scams offering cheap warranties and, generally speaking, you get what you pay for. And unfortunately some of these scams aren’t even legitimate warranty companies.
Because it can’t be stressed often enough, remember that you shouldn’t ever give identifying information or credit card or bank information to someone you don’t know either by phone or email. And since email is NOT secure, don’t ever send your payment information via email.
Do your research before you buy! You can check the Better Business Bureau and Web Assured to find information about the warranty company that has contacted you. Know their reputation before you buy.
Compare Offers on More than Price
Don’t compare on price alone. Be sure to look at what is covered and what is excluded in each car warranty you are considering. In many cases you’ll find that the warranty doesn’t cover the types of future repairs you might actually need, and you would be better off putting that money in a savings account instead of sending it to the warranty company. Then when your car needs a repair, you’ll have your own warranty fund.
Most warranty companies will divide claims into mechanical breakdown or wear and tear. You want warranty coverage for both, but in many cases the cheap warranties will only cover mechanical breakdown, and they get to define exactly what that means. And when they have an auditor look at your claim, you can bet they will decide it was wear and tear and you’ll find your claim refused. So if you’re going to pay for an extended warranty, be sure it includes both types of coverage.
If you buy an extended car warranty on an older vehicle, you are gambling that some future repair will be covered, so be sure to get detailed explanations of what is included or you can find yourself paying twice: once for the useless warranty and again for the actual repair.