Wednesday, May 18, 2011
Auto Warranty|Listen Up or Lose Money
The world of extended warranties for cars is a large and confusing place. Vehicles can have a manufacturer’s warranty, extended warranty, product warranty, a vehicle service contract, or mechanical breakdown insurance. To further complicate the situation, each of these has its own laws and regulations which govern the application of them, and can have their own specific benefits or limitations.
Let’s begin with a manufacturer’s warranty, it is provided for the new and original (no modifications) vehicle by the maker. This type of warranty covers specific areas of the vehicle and is enforceable for a set number of months or miles driven, this is mandated by law.
Once the manufacturer’s warranty has expired the vehicle is used and has additional miles on it, the next step is an extended warranty, a vehicle service contract or mechanical breakdown insurance. This is a basic contract between the vehicle owner and the warranty company which covers specific parts of the vehicle to be repaired or replaced in the event it fails. These warranties become more appealing when they are offered with the additional benefit of 24/7 roadside assistance, a wear and tear coverage, rental car reimbursement and in some cases traveler’s insurance. For these reasons, when considering an extended warranty it is a good idea to research and find the best deal possible. Again, each warranty is regulated by the state.
The best warranty companies can be found on A.M. Best & Company’s “A” list.
Product warranties are warranties on an additive or product. These are a promise and backing by the Admin. regarding the product being used.
A major difference between an extended vehicle warranty and a product warranty is the extended warranty has to be backed by an insurance company and a product warranty does not.
Everyone has that nightmare story of how they were done wrong by the vehicle, here are a few tips to help you avoid that problem.
• Always thoroughly read the contract, do not be afraid to ask questions.
• Get a pre purchase inspection by a certified mechanic. These inspections are usually a small fee $100-$250, and will prevent the warranty from saying an issue was pre existing.
• Be diligent in the maintenance of the vehicle. This is a quick way for the warranty to become null and void.
• Establish where the repairs need to be done, many companies have specific shops they use.
• Know how the claim/repair is paid. Some companies pay the shop directly, others want you to pay the shop then reimburse you.
• Check the deductable, this can be a one time total, or per repair.
• Verify the expiration of the contract, the the exact odometer reading or specific date.