Here’s a thought. Instead of agonizing over the cost of an extended warranty plan for your automobile, why not save the manufacturer’s rebate you get on your new car and use your savings for a discounted online extended auto warranty? It may be hard to believe but most online car warranties are 40% cheaper than car dealerships, where they tack on a retail markup. You can get free quotes for warranties online, which can allow you to barter with your dealership, if need be, or it may just afford you the best deal out there and you won’t even have to leave your home to take advantage of it! There are many ways to ensure you make a reasonable decision.
First of all, be sure you’re dealing with a solid company. See that they’re listed in the Better Business Bureau or Web Assured, and that they have years of experience. For example, Warranty Direct has been in business for 26 years and NWC have been in business for 20 years. Read consumer comments and testimonials, check to see if the company services any dealerships and ask if they have a reinsurance program, which means they will be good for the money, even if many people are filing claims all at once.
Secondly, understand your extended warranty plan coverage before you buy. Ask for a very clear, specific “What’s Covered/What’s Not Covered” list. Typical exclusions that no auto extended warranties will cover include: glass, lenses, sealed beams, light bulbs, trim, moldings, bright metal, upholstery, paint, exhaust systems, tires, air bags, batteries, brake rotors, drums, shock absorbers and throttle bodies. However, feel free to ask if they cover things like the anti-lock braking systems, overheating and “wear and tear” coverage. Don’t settle for “mechanical failure/breakdown” coverage only! Also, be sure you ask whether your extended warranty begins at the time of purchase or after the manufacturer’s warranty expires.
An extended warranty plan can be a good investment for some people, particularly those who own lower-end models, those who drive more than 14,000 miles annually, or those who have limited manufacturer warranties. Some people feel more comfortable having that peace of mind, but they must be careful not to assume everything is covered under their extended auto warranty. Auto owners must also be aware that routine oil changes, air filter changes, tire rotations and other maintenance is the best thing they can do to protect their investment!