When you make the decision to buy a new car, one of the biggest after-sale products that a dealership will offer you is an extended warranty. In some cases, this can be well worth the investment, while in other it may not be. We highly advise asking the following questions below to get a better idea of which category it falls in for you.
1.) Who Withholds The Warranty Contract?
Just because the dealership is the one pushing the warranty program, doesn’t mean they are the ones who will honor it. In fact, many car dealerships will only offer third party extended warranty programs. In the case you need to file a claim, you will have to deal with another company that actually withholds the warranty contract.
2.) Is This The Best Warranty Price Available?
Extended warranties are not just available from the car dealership. You can get these through the auto manufacturers and independent agents. Be sure to do your research and check around for different prices and coverage levels. Each extended warranty program is likely to be a little different than the next, so reviewing the policy agreements before signing is ideal.
3.) What Is Covered And What Isn’t?
This is an extremely important factor when it comes to an auto warranty. You need to know exactly what is covered under your warranty program. It’s likely there will be coverage limits, authorized service stations, and exclusions to the program.
Many warranties will not cover the replacement of wear and tear parts as well as maintenance on a vehicle. They consider this the vehicle owner’s responsibility. Their coverages will typically be for non-wear and tear parts as well as roadside assistance.
Always read the fine print of the program. In some cases, there are different levels of coverage. You want to make sure you pick a level of coverage that will help cushion the financial burden of an unexpected car repair. Checking for what service stations are approved to do work is imperative as well. Some dealership extended warranties require you to have the car serviced at the dealership and won’t cover the costs of any repairs at other service stations.
You should take time to figure out how the warranty provider pays for the repairs that are covered under your agreement. Do they require you to pay upfront and then send you a check for reimbursement? Do they require you to call them to authorize the repairs before they will pay the repair station for the services? These are questions that you want to get an answer to before signing the agreement.
4.) Will You Regret Not Getting It?
Some individuals have learned that not getting an extended warranty or insurance coverage is something that will nag them far into the future. If you decided against the extended warranty at the time of purchase, but are regretting that decision now, you can likely add on the extended warranty now.
5.) Have You Took Your Car Repair History Into Account?
While you don’t have a crystal ball to see into the future, you can take an educated guess about the types of repairs your car may need. There are many different add-ons for an extended warranty program. You should look at your car repair history to see if these add-ons make sense for you to invest money in or not.
For example, road-hazard warranty may be an option, but if you have never had an incident that required this in your 40-year driving history, it’s very likely you won’t need it. Use your common sense when it comes to determining the adequate amount of warranty coverage that you will need.
Now that you have a better idea of what questions you should be asking the dealership, you will be able to make an informed decision about an extended warranty contract on your new car. We encourage you to take the time to figure out if the warranty is right for you.
In most cases, you have from the time you purchase the car until the time the factory warranty expires to purchase the extended warranty from the dealership. Take advantage of this time and don’t let the car dealership rush your decision.