Extended Used Car Warranty
If you have just purchased a second hand vehicle and are interested in getting extended used car warranty, there are a couple of things that you should know. First of all, you need to proceed with caution regarding this aspect as many of these extended warranties are huge moneymakers for car dealers who sell them. One simple wrong move or decision could cost you hundreds of dollars, even thousands if you are out of luck. According to Phil Reed who is a consumer advice editor at Edmunds, “I think you have to automatically assume a 100 percent markup.”
You must remember not to be pressured into signing such an extended warranty before you are certain that you are ready for one and you really need it. A typical extended warranty is in fact an extended service contract that will cover the costs of certain problems and repairs after the vehicle’s factory warranty expires.
Before signing on an extended warranty deal, you need to take a very attentive look at the vehicle’s original warranty. Cover the basics: how much coverage is left? Two years? A thousand miles?
Many of the automakers now offer warranties that stand above and beyond the once standard set-in-stone 3-year / 36,000 miles cover. New sold cars made by BMW, Mercedes, Jaguar, Lexus, Lincoln, Saab, Volvo or Acura are sold with 4-year or 50,000-mile warranties. Cars manufactured by Infiniti come with a 4-year 60,000-mile warranty. Hyundai and Kia sell their cars with a five year or 60,000-mile warranty, plus a 10-year or 100,000 miles powertrain warranty that covers transmission and engine repairs.
The vast majority (but not all) factory warranties get transferred to the new owner of the car at the time of the transaction. In the recent years, important automakers like Volkswagen, Honda, Ford, Mercury, Lincoln, Audi and Volvo have raised their warranty protection on certified cars. Most of the luxury car manufacturers offer 2 years of additional warranty to certified used-car purchasers. There are other programs that offer an additional 12 months or 12,000 miles of warranty after the original one expires.
Once you have found out how much warranty is left on the car, you need to think about how much long you are going to keep it. Let’s take an example. For instance, if you plan on selling your current car in the next four years and you have one year of warranty left, what do you do? Do you spend money for the three year extended service contract? Or save money and decide to pay for any potential future repairs? According to John Nielsen who is the director of AAA’s Approved Auto Repair Network – “if you just save that money the odds are that you’ll come out ahead.”
However, if you really hate unwanted expenses and if fixing the car’s air conditioning system or the transmission will ruin your monthly budget, an extended warranty service for your car should be signed. Another aspect to take into consideration is the reliability of the vehicle. First of all, cars are now way more reliable in comparison to previous generations’ vehicles which mean that you can expect considerably fewer repairs. On the other hand, if something will break down, be prepared to pay a lot because of the complex electronics under the hood.
Some people say that a car owner must look at an extended warranty service as a bet. The driver is betting something important and big is going to happen to the car during the contract. The company on the other hand, is betting that this situation will not occur. In most cases, the company wins as according to Edmunds, the average repair claims against a $1,000 extended service contract come to approximately $150.
If you did not know, there are two types of extended used car warranty. First you have the one backed by the vehicle’s manufacturer and the second one is offered by independent companies which are also known as aftermarket warranties. The first one covers a rich array of services and repairs. These repairs will be done at any authorized dealership and are usually approved without any problems. The other type of warranty will most likely cost 30-40% less (even 50% in some cases), but the downside is that the quality varies widely from company to company which is why you should be careful when picking one up.
Prior to selling you a warranty contract, the company will want to have the car inspected by a mechanic. In some cases, some of these contracts require used car owners to wait a month or 1,000 miles before filing the repair claims. Do not forget about the fact that the higher the mileage your automobile has, the harder it will be for you to find a decent extended service contract. The vast majority of the extended car warranties end when the car reaches 100,000 miles. Many of these contracts are not valid once you sell the car while others are transferable, but most likely with a fee.
For finding the best extended used car warranty you will need to shop around. You will notice that if you call three dealers, you will most likely get different prices for the exact same contract. The price of an aftermarket warranty also varies which is why it is highly recommended to do some thorough research before choosing one. With aftermarket warranties you will most likely be obligated to pay for the entire repair upfront and after that wait to get your money back, which could take even a few weeks. One last piece of advice would be to do business with well-known companies that you can fully trust. Be very careful when you get a warranty over the Internet as there are many scams out there.
Post tags: Tags: Extended Used Car Warranty