The defective parts or materials in automobiles are usually covered by the manufacturer’s auto warranty for at least one year, often more. Yet when the manufacturer’s warranty expires, you, the owner, are left with the repair costs. While your car may not need a major repair for years after the warranty expires, chances are it will, leaving you with a huge repair bill. Fortunately, there are ways to combat high repair costs.
An extended auto warranty is a good way to lower your repair costs by investing in additional warranty coverage to start once the original warranty ends. Extended warranties can occur for as long as you’d like. All you have to do is specify the terms whenever before you sign the final draft of the auto warranty contract.
Extended auto warranties are like insurance, however, in the fact that not every customer is going to need to take advantage of auto warranty services. Some people may not want to purchase coverage, believing they won’t need it. Yet should you require major repairs and don’t have a warranty, you may be paying more than the warranty would have cost.
There are one of two places you can pick up an auto warranty – auto dealers or a broker. Most of the time the cost of auto warranties will exceed the cost of repairs up to a full year for all other purchases that are made. Your dealer could resell that auto warranty to a broker at any time as well. This is the main reason that you should buy a vehicle from a major manufacturer with outstanding warranties and extended warranties also.
Generally after a vehicle warranty hits its expiration date, brokers and dealers will insist on you purchasing a service contract extension. While an extended auto warranty is a good idea, as it can save you money in the long run, you have to be weary of who you buy form.
In a market rife with scams, here are a few that you should be aware of:
– The Under Sell– This sales tactic quotes you a limited coverage plan price when you could actually qualify for higher coverage. They are luring you in with the low price and hoping you don’t see the lousy coverage.
– TV Endorsements/Celebrity Endorsements– This is more along the lines of a marketing trick than anything. Just because you see it on TV or a celebrity says that it is good doesn’t mean that it actually is. Do your own research.
– Phone Calls/Mail– If you get something in the mail that may look official and says that your car or truck warranty is going to expire, rip it up and trash it. Especially if you don’t have a warranty.
– The “Special”– This is otherwise known as “mark up the markdown”. What they do here is set the price at a very high level and show you that number and then slash it considerably to let you see how great of a deal they are giving you. No major company is going to do this.
– You can get 0% Financing– If they tell you that you can pay in full and save money, then it isn’t 0% financing. There are hidden charges somewhere.
– Bumper to Bumper– Few, if any, companies will offer this kind of coverage because there are literally so many parts involved that it’s impossible to list them in the contract. Usually they will only list the ones that won’t be covered. Read your contract before signing.
– Buy a Warranty or You Won’t Get Financed– This is false and illegal. If a dealership says you won’t be financed without buying an additional extended warranty, walk away.