Understanding Automobile Extended Warranty
An extended warranty is a prolonged guarantee offered to the customer by the manufacturer, retailer or warranty administrator, in lieu of extra money or a percentage of the retail price. In the United States, extended warranty is an assurance of the reliability of a particular product in normal circumstances.
Extended Warranty Information
An extended warranty is a backup for electrical or mechanical breakdown of goods, ranging from automobiles to electrical appliances. Such warranty doesn't cover accidental damage, normal maintenance, damage by computer virus, etc. Special administrators are employed by all the major retailers to look after the claims, and more importantly ensure that the product is reasonably priced. The insurance covers the cost of repair, and replacement in case repair is not viable. Before opting for extended warranty, it is very important for the customer to read the terms and conditions, and understand them thoroughly.
Automobile Extended Warranty
Automobile extended warranty is an insurance policy of the vehicle, as a safety measure against unanticipated repair problems that can create a hole in your wallet. An extended warranty can be purchased, either at the time of buying the vehicle, or sometime after you own the vehicle. It is always good to be prepared for contingencies, and taking into consideration the ever-growing costs of vehicle repairs. So we can say that extended automobile warranty is a must.
Before purchasing an extended warranty, one has to be clear about a few things. For instance, if the car manufacturer has offered a 4-year warranty on the car, and you are planning to own it only for 4 years or less, then there is no need to go in for extended warranty. The manufacturer's warranty in itself will cover your ownership period. But, if you plan to own the car for 6 years, then it would be wiser to opt for the extended warranty, as you would be owning the car for 2 years after manufacturer's warranty gets over. One should also take into consideration the vehicle model which is being purchased. Models which have a mixed response in the market may or may not work wonders for you. Therefore, to be on the safer side, the vehicle extended warranty should be purchased in such a case.
In some cases, the extended warranty is backed by an independent insurance company. This is known as an 'aftermarket warranty'. Though they are relatively cheaper, one should consider doing a background check of the company, including their financial position in the market. In some extended warranty plans, the policy is terminated as soon as the person who purchased the warranty sells the vehicle, while in others the extended warranty is transferred to the new owner. Purchasing a warranty which is transferable is advantageous, because it will also add as a bonus point when you plan to sell the vehicle.
The policy should be properly understood before completing the formalities. The mode of amount deduction should be properly crosschecked. In the 'per visit' mode, a stipulated amount will be deducted every time you visit the workshop, irrespective of how many parts you have got repaired. In the 'per repair' mode, only the amount applying to the serviced part is deducted. Similarly, a 'breakdown' warranty only covers the repair of parts that break, while a 'wear and tear' warranty' facilitates replacing a worn down part.
Some extended warranties have stipulations, like repairs should only be done from the dealer from whom the extended warranty is purchased. This can become inconvenient considering that car breakdowns don't come with prior warnings. So its wiser to opt for a warranty which gives you the choice to pick the service station. Some companies reimburse you with the money after the bills showing the repair costs are submitted to them. The disadvantage of this being a long wait before your bills are finally cleared. Hence, the warranty which pays to the dealer directly is more preferable.
Any kind of auto warranty can prove to be a lifeline for your vehicle. Therefore, you should think twice before you purchase one. Do some research, understand your needs and only then choose a plan. Though, the difference between two plans may look negligible, in the long term it can prove to be quite a strain on your wallet.
