Understanding Automobile Extended Warranty

 Auto Warranty  No Responses »
Dec 202011
 

An extended warranty is a prolonged guarantee offered to the customer by the manufacturer, retailer or warranty administrator, in lieu of extra money or a percentage of the retail price. In the United States, extended warranty is an assurance of the reliability of a particular product in normal circumstances.

Extended Warranty Information

An extended warranty is a backup for electrical or mechanical breakdown of goods, ranging from automobiles to electrical appliances. Such warranty doesn’t cover accidental damage, normal maintenance, damage by computer virus, etc. Special administrators are employed by all the major retailers to look after the claims, and more importantly ensure that the product is reasonably priced. The insurance covers the cost of repair, and replacement in case repair is not viable. Before opting for extended warranty, it is very important for the customer to read the terms and conditions, and understand them thoroughly.

Automobile Extended Warranty

Automobile extended warranty is an insurance policy of the vehicle, as a safety measure against unanticipated repair problems that can create a hole in your wallet. An extended warranty can be purchased, either at the time of buying the vehicle, or sometime after you own the vehicle. It is always good to be prepared for contingencies, and taking into consideration the ever-growing costs of vehicle repairs. So we can say that extended automobile warranty is a must.

Before purchasing an extended warranty, one has to be clear about a few things. For instance, if the car manufacturer has offered a 4-year warranty on the car, and you are planning to own it only for 4 years or less, then there is no need to go in for extended warranty. The manufacturer’s warranty in itself will cover your ownership period. But, if you plan to own the car for 6 years, then it would be wiser to opt for the extended warranty, as you would be owning the car for 2 years after manufacturer’s warranty gets over. One should also take into consideration the vehicle model which is being purchased. Models which have a mixed response in the market may or may not work wonders for you. Therefore, to be on the safer side, the vehicle extended warranty should be purchased in such a case.

In some cases, the extended warranty is backed by an independent insurance company. This is known as an ‘aftermarket warranty’. Though they are relatively cheaper, one should consider doing a background check of the company, including their financial position in the market. In some extended warranty plans, the policy is terminated as soon as the person who purchased the warranty sells the vehicle, while in others the extended warranty is transferred to the new owner. Purchasing a warranty which is transferable is advantageous, because it will also add as a bonus point when you plan to sell the vehicle.

The policy should be properly understood before completing the formalities. The mode of amount deduction should be properly crosschecked. In the ‘per visit’ mode, a stipulated amount will be deducted every time you visit the workshop, irrespective of how many parts you have got repaired. In the ‘per repair’ mode, only the amount applying to the serviced part is deducted. Similarly, a ‘breakdown’ warranty only covers the repair of parts that break, while a ‘wear and tear’ warranty’ facilitates replacing a worn down part.

Some extended warranties have stipulations, like repairs should only be done from the dealer from whom the extended warranty is purchased. This can become inconvenient considering that car breakdowns don’t come with prior warnings. So its wiser to opt for a warranty which gives you the choice to pick the service station. Some companies reimburse you with the money after the bills showing the repair costs are submitted to them. The disadvantage of this being a long wait before your bills are finally cleared. Hence, the warranty which pays to the dealer directly is more preferable.

Any kind of auto warranty can prove to be a lifeline for your vehicle. Therefore, you should think twice before you purchase one. Do some research, understand your needs and only then choose a plan. Though, the difference between two plans may look negligible, in the long term it can prove to be quite a strain on your wallet.

 Posted by at 3:32 am  Tagged with:

Car Warranty Problems

 Auto Warranty  No Responses »
Dec 152011
 

Car warranty is the guarantee on the part of the manufacturer or retailer, to bear the responsibility of the repairs required by the vehicle within the stipulated warranty period, in return of the nominal fee charged on the policy. Purchasing a car warranty policy is necessary, considering problems don’t come with an intimation. A car breakdown during the onset of your financial crisis can land you in deep trouble. If your car is covered under by auto warranty, you can be relived about problems such as car breakdown or much-needed change of some worn out part. But there are some circumstances wherein the warranty itself can become a problem. Such problems are mainly caused by the lack of knowledge about the policy we choose.

Car Warranty Problems

Very often people are found complaining about their car warranty policies. These problems with warranty are more often attributed to haste in warranty policy purchase. When we buy a car, we tend purchase the warranty policy from the same retailer. This is done because it’s the first policy offered to us, and we are so enthusiastic to own the car that we tend to overlook those hidden charges in the policy. It is often noticed that retailer’s policies are relatively costlier than policies offered by companies that exclusively deal in auto insurance. One should undertake exclusive research, taking into consideration his wants, budget and what the policy has to offer, before narrowing down on the single policy to be purchased.

Another common problem about car warranties encountered by the owners is inadequate cover. Though all the polices sound almost similar, there is a lot of difference between two policies. Not all policies cover all the parts of your vehicle. Some policies only cover car breakdowns, while some only deal with wear and tear of car parts. In such situation, again research plays an important part. It is very important to research and find a policy which suits you. If you use the car extensively, it will experience a lot of wear and tear. In such circumstances, you can’t wait for the car to breakdown just because you have a warranty policy which only covers car breakdowns.

Extended car warranties are becoming more and more popular today, but that doesn’t mean it is beneficial for all owners, or for that matter all cars. These policies cover the period which starts after the manufacturer’s warranty period gets over. In most of the cases, an automobile extended warranty is backed by some independent insurance agency. Therefore, it is quite important to know about the companies background before purchasing a warranty policy from the same.

Warranty policy being declared invalid in one of the most frustrating problem encountered by the owners. Most often, the warranty claim is rejected owing to owner’s failure in adhering to the terms mentioned in the policy. In some cases, people complain that when they came to pay the claim they had to pay a large excess. One has to understand that the excess level is set by the company. It may differ from part to part. An individual must keep himself updated with such minor information which are important terms of the policies.

Most of these problems occur as people don’t really take the pain of reading the fine print which covers all the clauses and reservations of the policy. One has to understand that car warranty policies differ according to price as well as quality. Understanding the policy before signing on the dotted line is an absolute necessity, as it saves you time, money, as well as a big headache later.

 Posted by at 3:29 am  Tagged with:

Extended Warranty: Aftermarket Car Warranty

 Auto Warranty  No Responses »
Dec 102011
 

A car warranty, that is provided at the time of purchase of a new car, is akin to a guarantee by the manufacturer to provide remedial measures like repairs and replacement free of cost, for a certain period of time, provided the repairs are not on account of negligence on the part of the owner. Vehicles come with a bumper-to-bumper factory warranty, emissions warranty, tire warranty and body rust and corrosion warranty. Sometimes, emergency roadside assistance may also be a part of manufacturer’s warranty. Once the warranty expires, the buyer is no longer entitled to these benefits. Since car maintenance can be expensive, the need for used car warranty arises.

Types of Extended Warranty for Used Cars

Extended used car warranty, that can be purchased from a dealer, covers the cost of certain repairs that may be required after a car’s factory warranty expires. Extended warranties can be broadly classified into two categories: manufacturer’s warranty and aftermarket car warranty.

Manufacturer Backed Extended Warranty: This warranty is an extension of the factory warranty. A car covered under the manufacturer backed warranty entitles the owner to get his car repaired for free, provided certain conditions are satisfied. The biggest advantage of this type of warranty is the facility to get the car repaired by any dealer. One can choose a bumper-to-bumper warranty or a specialized warranty that covers transmission, engine and other parts which may cost a great deal of money to repair or replace.

Aftermarket Car Warranty: Aftermarket car warranty is provided by an independent company. Aftermarket car warranties are typically more expensive as compared to manufacturer backed extended warranties. In fact, the extended warranty may be restrictive and may not allow the buyer to get the car repaired by any dealer. Many times, the owner of the car is expected to pay upfront for the repairs with the assurance of reimbursement at a later date. However, the repairs may not be approved. Consequently the owner may have to bear the cost of repairs, despite purchasing an aftermarket car warranty. Generally, dealers offer aftermarket car warranties that have a very high mark up cost. Hence, a manufacturer supported warranty is a better option.

Factors to be Considered while Purchasing Extend Warranty on Cars

Mileage: High mileage on the car would makes it difficult to obtain an extended warranty. In fact, most companies refuse to provide extended warranty on cars that have more than 100,000 miles.

Cost-Effective: The age of the car is an important factor that determines the cost of the extended warranty. Since automotive repairs increase with age, the cost of purchasing extended warranty also escalates with the passage of time. Hence, it may not be sensible to obtain an extended warranty on a very old car.

Selling the Car: In case a person has decided to sell the car, in a few years time, it may not be prudent to opt for an extended car warranty. This is because most extended car warranties expire on selling the car. Sometimes, extended car warranties may be transferable to the new owner for a fee.

These are some of the factors that may influence the owner’s decision to purchase an extended service contract. Although extended car warranties may provide peace of mind to the owner, it may be unnecessary in case of reliable cars. Again, in case of old cars that have been driven around quite a bit, extended warranty may not be cost-effective.

 Posted by at 3:26 am  Tagged with:
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