Extended Warranties for Automobiles
All new vehicles come with a warranty from the auto manufacturer. Initial warranty covers the auto for a specific duration, usually for 3 years or about 36,000 miles. The duration and number of miles may vary in case of each manufacturer. So, an extended warranty covers certain repairs and services of your auto after the original warranty expires. Should you buy an extended warranty? Well, this is a common question asked by people. Here are some things to consider before buying extended warranties for automobiles. These will help you take the decision about the same.
What is an Extended Warranty?
Before looking at the things to consider while buying it, let's know what is an extended warranty. Extended warranty is basically a service agreement or a service contract between the warranty company and the car owner. This means that for the duration this warranty is valid, the company will pay in case of any repairs that are covered under this warranty. Well, remember that not all repairs are covered under extended warranty and it is one of the most important aspects that needs to be considered while signing this service contract.
Things To Consider
Wondering - "what should I consider when buying an extended warranty?" Well, here's the answer.
Who is Selling?
Basically you need to consider whom are you buying the warranty from. There are two types, one that is sold by the car manufactures and one that is sold by a third party. The one sold by third party is also known as aftermarket warranty.
Buying extended auto warranty from an authorized dealer is a smart choice, as it works just like the original warranty. In this case, you take your car to the dealer and the covered repairs will be done free of cost. In case you have an aftermarket extended warranty and take your car to the dealer or certified service stations, the shop will call the company from whom you bought the extended warranty for authorization and will also check whether the parts to be repaired are covered in the warranty.
Remember, when you buy an automobile extended warranty from a third party, you will not be essentially sold the best policy, as they are not bothered about what is good for the customer. Though the aftermarket policies are cheaper, those sold by the car manufacturers score high on ease of processing and reliability.
What is the Type of Deductible?
You need to check what is the type of policy's deductible before you buy one. So, apart from considering the total amount, you need to see whether you will be charged per visit or per repair. A per visit deductible warranty means, a fixed amount will be charged irrespective of how many parts were repaired and a per repair means you will be charged on each repaired part. Well, this makes a huge difference at times. Like if you take your car to repair 3 parts at a time. If you have a USD 100 per repair deductible warranty, you will be charged USD 300 and if you have USD 100 per visit deductible you will be charged USD 100. Deciding on this factor actually depends on the service history or condition and reliability of your car. Well, some contracts also offer zero deductible after paying some extra charges which can be checked out, as these are the best options.
Need to Pay the Bill?
Another thing to consider is whether you need to pay the bill or will it be paid by the warranty company directly to the service center or the dealer. In case, you need to pay the bill, it means your amount will be reimbursed later by the warranty company. Well, it might take months before you get back the bill amount. So it is best to go for one of the warranties that offers direct bill payment, instead of the reimbursement policy.
What All is Covered?
Make sure you check what are the car parts that are covered under the contract. It is a good idea to consult a mechanic to know what all coverage does your car need. You need to check whether the problems caused by wear and tear are covered or just those caused due to mechanical breakdown are covered. Remember that there are many problems that are caused to your car due to regular wear and tear and only in rare cases are there any problems caused due to mechanical breakdown.
Where Can You Get the Repairs Done?
Are there very few and specific dealers or service stations where you can take your car for repairs? Should the car repairs be done only at the dealer from which the warranty was purchased? Can you take the car to the repair facility of your choice? Well, if you can't take it to the repair facility of your choice, the warranty is limiting and inconvenient. It is best to opt for a warranty that at least gives you enough choices of service stations from where you can get the repairs done. This will be helpful and is highly essential in case you need your car to be repaired in between a long drive.
It is essential to think over the aforementioned points. A transferable warranty can be helpful in case you are planning to sell the car after a few months, as it can be a good selling point for prospective buyers. Also, considering the condition and reliability of your car will help you decide whether to go for an extended warranty or not. If you are ready for those unexpected expenses, warranty is not required. In any case, it is must to get the policy ready, understand the terms and conditions and avoid any problems that may arise later, before you sign on the service contract papers.
