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With the average age of today’s vehicles creeping past 9 years, many motorists stand to benefit from an extended warranty.
Posted by Angi
This type of service contract covers many of your car’s components after your factory warranty expires. Some policies offer coverage up to 50,000 miles, while others protect you for up to 100,000 miles—sometimes more.
If you’re planning to keep your vehicle well beyond its factory warranty, you should weigh the pros and cons of buying an extended warranty. We do not sell extended warranties, but we do process claims with 99% of the companies out there. Our first-hand experience is that the service contracts can deliver peace of mind while literally saving you thousands of dollars. We see these policies pay for themselves every day for our clients.
That being said, we’re well aware of the fact that many consumer advocates will tell you not to buy an extended warranty. We believe this is because your odds of recouping your money while keeping your car in tip-top shape depends on your auto care provider. For example, if you only go to quick oil change lanes for service, you’re less likely to get your money’s worth. The quick lubes are designed to get you in and out while selling you maintenance items like an air filter and maybe a fluid flush. They’re not in the business of inspecting your car for needed repairs.
But the situation changes dramatically when you choose a full-service facility, such as Star Auto Authority, for your car care needs. First, we identify warranty repairs for you. During every service visit, we perform a comprehensive, bumper-to-bumper inspection, and we ensure your car is test driven by an ASE-Certified Technician, who can detect suspension, steering, braking and drivability issues. We will fully inform you of your car’s maintenance and repair needs, and we know from experience which components your warranty will cover and which you’ll need to cover.
Second, we handle all aspects of the claim for you. We call the warranty company, explain the situation and obtain their approval for the repair. You don’t have to do a thing, and you don’t have to front the money for the covered repairs. Once your company approves the repair, they work with us directly. It’s pure money-saving convenience for you. But if your service provider isn’t 1) inspecting the car for needed repairs and 2) handling warranty claims for you, then the critics probably have a valid point. For us and our loyal clients, seeing is believing.
If you see the value in an extended warranty, let us be the first to say that not all policies are created equal. Here’s our advice for choosing the best coverage for your hard-earned dollar:
- You do not need to buy the service contract when you buy the car. If you are turned off by high-pressure sales tactics, don’t worry. A number of companies sell excellent extended warranties, and they’re not tied to any dealership or car maker. The sole benefit of buying the policy when you buy the car is that the cost is rolled into your monthly car payment. (Financially speaking, we’re not saying this is an ideal approach. We’re simply saying this is a way to buy a policy without having an additional out-of-pocket expense.)
- If you don’t buy the policy with the car, the best time to buy is typically before the factory warranty expires, often around 3 years or 36,000 miles. Vehicles meeting this criteria qualify for a “new car policy,” which offers more extensive coverage at a better price than “used car coverage.”
- For the best protection, choose a warranty with “exclusionary” coverage. This is the most common type of policy, and it covers all components except for a few clearly stated exceptions. Conversely, non-exclusionary coverage specifies which components are covered. If a failed part isn’t listed, it isn’t covered.
- Always purchase a policy that permits you to use the repair facility of your choice when extended warranty work is needed. A few policies require buyers to return to the selling dealership. (This is usually easier if you do not purchase the warranty through the dealer.)
- Some policies limit the amount per hour they will pay for labor. A few pay a maximum of $60 per hour, which is substantially below the per-hour average in Chicagoland. Look for a policy that does not cap the labor costs or for one that pays $100 or more per hour.
- Choose a service contract that charges one deductible per claim, not per procedure. For example, if you have a $50 deductible per claim and you’re addressing three warranty repairs in one service visit, your deductible will be $50. If your deductible is charged per procedure, you will pay $150 for the same three repairs.
- Keep in mind that extended warranties are not designed to cover all repair costs in all situations. For example, diagnostic procedures are not always covered and are rarely covered in their entirety. In the case of a noise caused by a faulty wheel bearing, the warranty company will cover the labor and parts for replacing the wheel bearing but may not cover the time required to diagnose the condition. Even though you can still expect some out-of-pocket costs, they will be minimal compared to paying for the repair on your own.
- It is smart to perform some due diligence on the underwriting company. (For example, is it a well-established name in the industry or is it a newcomer?) Not all of them are solvent, and some consumers have been left without coverage even after paying for it.
Do you need more information or assistance buying an extended warranty? Feel free to tap our collective industry knowledge.
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