Top 9 Auto Warranty FAQs
Top 9 Auto Warranty FAQs
By Rand Stuck
1. What is an extended auto warranty?
An extended warranty could be defined as a written understanding between the car owner and the warranty company, thus extracting a commitment from the warranty company to pay for repairs covered by the agreement for a slated period of time. With an extended auto warranty you are actually protecting yourself in the event of a sudden or unexpected mechanical failure. One major repair frequently results into costing an equal amount, or some times exceeding the cost of the warranty. As a consumer, you can perfectly understand the coverage only when you learn the terminology and standard industry norms. The levels of coverage extended vary considerably from company to company. Most states (36 of them) do not standardize the coverage, and therefore, you may have to learn to read between the lines in order to perfectly understand what is written in the contract.
2. What exactly does an extended warranty cover?
Consumer need to have complete knowledge of what is covered and what is not covered under extended warranty.There are 2 main categories to look into whether it has "breakdown" warranty coverage or "wear-and-tear" warranty coverage.A "breakdown" warranty provides coverage for the parts that break however not all parts fail due to breakage, some of them needs to replaced as they have worn out with time. "Wear-and-Tear" warranty provides coverage for the worn-down parts. Another major point to consider is , warranty should provide coverage for TSB. Car manufacture occasionally notify the consumer regarding a condition on vehicle that may exists and which requires immediate attention. That notification is called A Technical Service Bulletin (TSB) or Factory Service Bulletin. So make sure your extended warranty provides coverage for such TSB. In addition to above factors, also keep in mind that it should have coverage for ABS brakes and coverage for damage due to overheating, as overheating can lead to major part replacement such as radiator. So a consumer should consider all the above factors and pros and cons of each warranty before purchasing an extended auto warranty.
3. Why do I need an extended auto warranty?
Usually mechanical repair cost increase with the passage of time so it is a good option to invest in something that will help us save money in future. Consumer can take advantage of the extended warranty benefits like paying for towing, lost key/lockout, and car rental discounts. Irrespective of the fact whether we have a new car or an old car, buying an extended warranty will help us in paying heavy mechanical repair bills that we incur during the whole life of a vehicle.
4. Why should I purchase an extended auto warranty now if my vehicle is still covered by the manufacturer?
As your vehicle covers many miles and becomes older, the price for an extended auto warranty will automatically go up as do the repair expenses which are normally the case for an older, out-of-warranty vehicle. You are only purchasing total mileage coverage, and not extra mileage to your current total. Hence you have nothing to lose here but only gain. Taking advantage of your new vehicle and low mileage is the most prudent approach as you plan for unavoidable repair costs in future. An extended auto warranty will provide you with peace-of-mind protection in case of such unexpected expenses. Some are transferable, allowing for enhanced resale cost of the vehicle.
5. What about the deductible?
You have to thoroughly investigate a policy's deductible prior to affixing your signature. Pay attention not only to the amount, but also whether it is calculated at per visit or per repair. With a per-visit deductible, every visit to the shop will cost you a fixed amount, irrespective of the number of components repaired; a per-repair deductible applies to each serviced part. What sounds like a negligible difference may, under certain circumstances, may lead to a severe strain on your purse strings. For example, let us assume you've got a $100.00 per-repair deductible and you take your car in to get the air conditioner, fuel pump and alternator serviced, you'll be spending a staggering price of $300.00. Had you opted for a per visit deductible, all those repairs would only have cost you only $100.00. Hence, understand the implication and tread carefully. There are still $0.00 deductible policies. But then, you will have to pay extra for this type of extended auto warranty, but if your circumstances warrant that you have to take your car in more often, you'll find that this policy is more beneficial.
6. What type of auto warranty should I buy?
Powertrain Warranty: This warranty covers only engine, transmission and parts of drivertrain. Drivertrain includes all the parts through which oil flows. There are about 29 parts in this. It is said that these parts failure rate is pretty less. There are about an average of 1000 parts in a vehicle. And the powertrain do not cover most of the parts, it is not recommended. Bumper-to-Bumper Warranty: This covers almost all the parts from the from bumper to the back bumper. It has got an exclusion list which has the parts that are not covered under this warranty. Seeing a list of parts excluded makes the choice much easier with no much complications. Named Component Warranty: This warranty covers on a major mechanical system in a vehicle. Any parts that do not come in this system is not covered by the warranty. NOTE: There are a few companies which sells the same kind of policies listed above and mention bumper-to-bumper. This could be a poor coverage which is deceptive. None of the warranty covers the consumer products like brakepads,windshields,wiper etc. extended auto warranty package also offers Roadside assistance and travel reimbursement plans. This could be taken i addition to the basic warranty also. There are a few which offers a stay and meal in case of breakdown.
7. If the manufacturer's warranty for my vehicle has expired, can I still obtain extended auto warranty coverage?
If the manufacturer's warranty for my vehicle has expired, can I still obtain extended auto warranty coverage? People should be conscious about the fact that the a vehicle is eligible for an Extended warranty even after the expiration of manufacturer's warranty. Most of the vehicle with miles less than 100,000 can be covered. The failure rate of vehicles is high when their manufacturers warranty expires. So the vehicle has to be examined and insured.
8. How does the claims process work?
The Warranty process starts when your vehicle breaks down. It is towed to a licensed Service department. The warranty papers are submitted to them. After examining the problem, the service people will call the claims administrator and receive a repair approval. The claim amount is paid directly to the service department. You don't have to pay for the repairs.
9. How do I get an instant quote for rates?
Make sure the warranty company has a good financial consistency and their record on paying for claims Warranty Direct is one recommended by most among all the warranty companies Their history starts 25 year back with over 2 million signed contracts. Asset value is about $165 million. The claims worth $500 million have been paid. They are reinsured by an 'A' rated A.M. The company is worth $2 billion in assets and a best insurance company in the market.
Rand Stuck is a BMW master mechanic with over 12 years of experience. He currently manages the online parts department of a BMW performance parts retailer. You can find additional information on Used Car Warranties and BMW OEM parts at AutoWerks.
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