SHOULD I BUY THE EXTENDED WARRANTY WHEN I BUY A CAR?

What to look for when buying an extended warranty for your vehicle

1) Length of time of the plan

2) Mileage the plan covers

3) The combination of time versus mileage (make sure it works for you)

4) The reputability of the provider of the plan

5) What the plan covers (read the fine print carefully!)

Extended service warranties, often called vehicle service contracts, are often an investment in peace of mind for a car buyer. However, there are several things to consider before you purchase such a policy. It is important to understand that an extended service contract is really an insurance policy on the mechanics of your vehicle and, like any insurance policy, will cover certain issues and will not cover others. Therefore, when buying such a policy it is important that you investigate the source of the coverage and the company.

This blog will briefly outline what to look for when purchasing an extended contract for your vehicle. For many car buyers, purchasing the extended warranty or vehicle service contract can reduce the financial worry of costly repairs. These are often more cost-effective on higher end vehicles in which repairs can be costly, even a simple repair.  

Where can I Purchase an Extended Warranty

Extended warranty plans, also called mechanical breakdown insurance, are available from various sources. The dealership will often want you to purchase the extended warranty when you buy your vehicle. They are also available through auto clubs like AAA and various insurance companies. Since these plans can vary in the length of time, the price, and the coverage that is provided for your vehicle, the small print really matters in these policies. In addition, these are aftermarket programs and they usually have specific limitations as to what repairs they will cover and where the work could be done. This is extremely important, especially if you are a person who likes to take your vehicle to a specific mechanic or dealership. Be very careful to review the policy you are purchasing to make sure that you can take your vehicle to the dealership or to your own mechanic.  In fact, take this blog with you if you are going to buy a vehicle and make the finance representative circle the provisions in the warranty policy regarding these issues before you purchase the policy.

When purchasing your extended warranty from the dealership, they might offer you various warranty programs from different companies. If you are going to purchase the extended vehicle warranty at the dealership, you should make sure it is backed by the manufacture of the car and not just the dealership or a third-party company. A manufacturer backed extended warranty can be used at any dealership in the United Stated.   Again, it is important that you have a choice to take your vehicle to the dealership. In addition, many warranty policies are only honored at the dealership where the vehicle was sold or certain mechanics.

Some policies are definitely better than others.

For example, AAA offers a vehicle service contract that includes warranty protections and also extra services such as battery placement, reimbursement for travel expenses if you are on a trip and rental coverage while your vehicle is being fixed.  If you do your research and look for the right plan, you can really get more bang for your buck. But also be careful to purchase from a large reputable company. At the Law Offices Of Laura Payne-Hunt, Esq. we strongly urge consumers of extended warranty protection programs to only purchase them through a large dealership, a national auto club, an insurance company like AAA or Farmers or State Farm, or the manufacturer such as General Motors or Ford. There are a large number of “fly-by-night “extended warranty service companies and you will get many letters and even crank phone calls from these companies. Do not purchase an extended warranty policy from a vendor you have never heard of or who calls you on the phone or sends you an unsolicited letter. Many consumers have been burned by these companies. However, there are reputable, extended warranty programs for your vehicle available that can bring you peace of mind and possibly save you significant repair costs.

For example General Motors offers an extended warranty plan that can only be purchased with a new car. The cost of that plan can be rolled into the financing and is transferable, which could boost the cars value. However, it is important to note when financing a warranty policy on a new vehicle, if your vehicle becomes a total loss that may be a cost that is not reimbursable. Therefore, you should ask the dealership when purchasing that policy if the car is totaled before the term of the policy where will there be a refund of the remaining balance. Sometimes they are nonrefundable and sometimes they are refundable if the car is totaled before the term of the policy. This is an important question to ask the dealership and make sure you see that in writing in the policy. Make the finance representative point out and circle that provision of the policy for you.

Shop for the best price before you go to the dealership.

Extended warranty policies are often put in front of the car buyer at the time of purchase of the vehicle. It is likely that you have not thought about this piece of your purchase or compared rates at that time. The finance manager will put the paperwork in front of you and make it sound like it is the best deal available. At the Law Offices Of Laura Payne-Hunt, we are skilled in personal injury law and contract law. We urge you to research this contract before you purchase an extended warranty vehicle policy. Before you go to the dealership to purchase a new car, call AAA, go online to check with the manufactures, and shop for the warranty so that you are familiar with what a reasonable cost is before you get to the dealership. It is not likely that the dealership is going to offer you the best deal at the time you purchase your vehicle. You should understand that the price of that extended warranty policy from the dealership is often negotiable. They might tell you that the price is not negotiable. However, when you see that is being offered a lower price from other vendors you’ll understand that is not the case, and can effectively negotiate a fair price for the coverage.

Understand what is covered

I touched on this earlier, but it is extremely important that you understand what you are buying at the time you purchase an extended vehicle warranty contract. Not all warranties are the same and some are not even close.  The very greatly in the time the policy lasts and the mileage that is covered. Often, wear and tear parts such as brakes brake pads, lightbulbs, and tires are not covered under extended warranties. However, there are further complications and usually levels of packages offered in these warranties, each with a different price and each with a different coverage –similar to health insurance. Take the time to read the fine print and know what is not covered. Often times you will be shocked at certain mechanical conditions they will claim are not covered and you do not want to find that out at the time the repair is needed. Also, check the deductibles offered.  Different packages are also based on different deductibles. Understand what your finances can afford and what the average cost of repair is for your vehicle. If you were buying a more modest vehicle, then a smaller deductible would probably be more cost-effective. On higher end vehicles where repair costs are generally over $500, it may be cost-effective to get a policy with a higher deductible.

If you have a question about an extended warranty policy and/or any questions regarding a personal injury, whether from a car accident or a slip and fall or any combination of injuries, please don’t hesitate to call The Law Offices of Laura Payne Hunt, PC, and Henderson Injury Attorneys for over 13 years. Please call our office if you or if a loved one is injured.  We can make sure that you receive the care you need and deserve and advise on how to preserve evidence. If you have been in any type of accident and have questions, please don’t hesitate to contact our Henderson and Las Vegas Accident injury offices today. At our office, we are experienced in helping injured victims get the compensation they are entitled to. Insurance companies never have the best interest of the injured person at the top of their priorities.  They want to pay as little on every claim as possible. Having worked for an insurance company as an attorney for 9 years before opening my boutique law firm specializing in helping injured people, I reviewed thousands of auto accident claims and policy provisions.

         At the Henderson and Las Vegas Accident injury Law Offices of Laura Payne Hunt, PC we are here to help you and your family in the event that accidents and tragedies occur.  For any of your legal needs, do not hesitate to contact our Henderson and Las Vegas Accident injury Henderson offices. The Law Offices of Laura Payne Hunt is a boutique, family owned law firm in Henderson that specializes in helping injured people and the community with legal issues involving auto accidents, wrongful deaths, slip and falls, truck accidents, injuries to children, bicycle accidents, dog bites, and all types of injury claims.  Please do not hesitate to call us anytime you have a legal question or you or a loved one has sustained an injury at 702-450-(HUNT) 4868 and text 24/7 at 702-600-0032.