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When your purchase a new vehicle, it’s very likely that you will be offered an extended auto warranty by the dealership. These are available at both dealerships and independent retailers. You should be prepared with the list of questions below to ensure that a potential extended warranty program is right for you and not a waste of your hard-earned money.

 How Long Does It Last?

Newer vehicles have a factory warranty. You should be aware of what your factory warranty covers and for how long it lasts. This will give you an idea of when your extended warranty will take over.

You should know how long the extended warranty lasts. In some cases, this may be a specified amount of months or mileage amount. It may even have both in its contract. You could agree to an extended warranty that lasts up to 36 months or 100,000, whichever comes first.

 What Does The Warranty Cover?

It’s very unlikely that you will find an extended warranty that is cut and dry in covering every possible problem with your car. These warranty contracts will have a specific section stating which sort of repairs are covered under the contract.

You should look for the coverage on wear and tear parts as well as on other parts. The wear and tear parts are parts of your car that eventually reach mechanical failure due to regular use. Other parts only need to be replaced when they break, which could happen at any time.

The contract should state the parts that are not covered under your extended warranty. This section typically includes tires, oil filters, and air filters. Read this section so you are aware of what you will definitely have to pay out of pocket for.

 What Is Your Deductible?

This deductible works just the same as many other insurance policies. This is a set amount of money that you will have to pay out of pocket at the time your car needs to be repaired. Once you pay your deductible amount, the extended warranty company will pay for the remaining repair amount that is covered under the program.

Many extended warranty deductibles can range from $50 to $200 or more. You need to check to see if your contract will require a deductible per repair or per visit. This makes a huge difference. In the case you take your car to the garage and they recommend two different repairs, you could be paying one or two deductibles depending on how your contract is set up. A per visit deductible would only require one payment. A per repair deductible would require two payments because you are having two different car parts repaired.

 Where Can You Get Repairs Done?

Some extended warranty programs will require you to get the work done at your local dealership that you bought the vehicle from. Others may allow you to get the work done wherever you chose. Reading your contract to figure this out is important as you don’t want to end up paying the full price for a repair because you didn’t take your car to the approved dealership.

It pays to look at who is responsible for upfront payment at the time of the repairs. It’s possible for the warranty company to require you to pay the costs upfront at a local garage and then send you a check for the amount they owe for the repairs. In addition, some warranty contracts may require that you contact the warranty company before proceeding with any repairs. In some cases, if you get the repairs done before the warranty company gives their approval they will deny your reimbursement claim.

 Does The Warranty Require Any Maintenance Work?

Warranty companies offer their extended warranty programs with the gamble that they will make more money from the monthly premiums they receive over the amount they have to pay out in claims. They realize that properly maintained vehicles typically cost less in repairs than vehicles which are not regularly maintained.

For this reason, many warranty providers will require you to have regular maintenance and checkups. These include things such as oil and transmission fluid changes. These checkups may have to be done at a dealership or may be done at a local garage or by yourself. You will need to check with your warranty provider for the details so you know ahead of time what you need to do to maintain your warranty coverage.