Extended warranites

[jumpincactus]

For those of you considering extended warranties here is some info to help you decide. Pay attention to the 2nd paragraph in particular. Makes a diff as to whether the extension runs consecutivly or concurrent to the mfgr stadard warranty.

 

The average service contract costs the dealership very little but they frequently sell for thousands of dollars. Unless you are absolutely sure that you are going to keep a new vehicle for years beyond the manufacturer's warranty—and manufacturers' warranty terms are getting longer—then extended service contracts don't make financial sense for most people.

 

Many extended warranty terms, for example, overlap with manufacturer's warranties but the consumer can't make a claim against them until the manufacturer's warranty expires. So you might think that you've bought a six-year service contract, but the policy doesn't kick in until the manufacturer's warranty runs for 5 years or 50,000 miles. In effect, you've paid big bucks for a one- or two-year contract. Some service contracts also cover only limited repairs.If you are buying a used vehicle that is no longer under the manufacturer's warranty, then a service contract may be more useful. But just as with a new vehicle, you must check out the terms and benefits just as you would for a new vehicle.

 

Give any service contract you are considering a very close inspection, read all the fine print, ask questions, and if you don't get satisfactory answers, don't buy it. Also negotiate the price. Then check our warranty product for competitive rates.

 

Tips for evaluating an automotive service contract

Making sure a service contract meets the following criteria won't guarantee that you, the consumer, won't get burned, but it can help.

 

Is the service contract provided by a national automotive manufacturer or a reputable national company? How long has the company been in business? What's their record of customer satisfaction?

Does the coverage term of the service contract begin after the manufacturer's warranty (or any dealership warranty on a used car) has expired? If it overlaps, does the contract provide "wrap-around" coverage, which means that the contract covers repairs not covered by the manufacturer's warranty? What are the actual years of coverage (those years after manufacturer's warranty ends) for which this service contract will be the only coverage?

Can you see a sample copy of the contract before you buy it? If you can't have a sample copy for review, think twice about considering that contract.

What services and repairs are covered under the terms of the contract? Does the warranty provide bumper-to-bumper coverage of both wear-and-tear and mechanical breakdown problems? Or does it cover just certain systems or parts? Or cover just mechanical breakdowns, not wear-and-tear failures? Experts advise that it's in the consumer's best interest that service contracts cover damage caused by overheating as well.

Does the contract require a deductible? How much? Is the deductible required "per visit" or "per repair"?

What entity under the contract provides the service for the vehicle under contract? Some contracts may require that the vehicle be serviced by a single service center, even if the breakdown occurred five hundred miles away. Better contracts allow the repair to be performed by any licensed, ASE-certified mechanic.

How is a claim or request for service made under contract? Must you get the contract administrator's okay before the repairs are begun? How quickly can you contact the contract administrator if that's the case? How quickly do they respond?

Does the service contract company (administrator) pay for the repair claims or does the consumer pay and get reimbursed? Avoid contracts that follow the reimbursement plan; it's too easy for the administrator to deny the claim.

Does the service contract company have a "claims reserve account" with a separate insurer to cover consumers with contracts should the company fail? If the company is insured by a separate entity, what is its insurance rating?

What are written policies on handling disputes over what repairs are covered and about handling problems with repairs made under the service contract?

Is the service contract transferable, if you sell the vehicle before the contract expires?

What's the warranty company's record with local and state consumer protection agencies, state attorney general's office or the Better Business Bureau?

Making a claim under an automotive service contract

[Grabber]

[mach1fever]

Good information, but your also forgetting if your planning on keeping the car until the wheels fall off that it will cost you more for the same coverage if you wait to buy later. You will also not be able to finance the warranty which for people who live pay check to pay check and are more likely to keep their cars is a detriment. Most manufacturers only offer a full warranty for 3 years 36k miles and in fords case only a powertrain warranty for 5 years 60k miles. This means your still liable for electronics, ac, trans, etc. Have you looked at the cost of an electric window motor lately. Also for those mechanically inclined you can save on labor, but what about those that aren't. Another thing to look for is if the warranty is specific to that dealer, or family of dealerships. For example can I only use it at Carmax locations. There are not that many carmax locations and if your far away from one it will cost you to have it towed to a location for repair. There are limits to the towing coverage. In short warranties depend on the buyer. If you offer one that is competitive and explain them well then the member/customer will make an informed decision. Sometimes the finance guys don't do that very well. Also dealers do not get to keep the full price of the warranty. They get a kick back for each one they sell and you get a pro-rated refund if you do sell the vehicle early.

 

Roger

[Alloy Dave]

So you might think that you've bought a six-year service contract, but the policy doesn't kick in until the manufacturer's warranty runs for 5 years or 50,000 miles. In effect, you've paid big bucks for a one- or two-year contract.

The 5/50 is only on powertrain. The other items are only covered 3/36, and there are a LOT of items that fall in that bucket. A single power window switch or stereo failure will really set you back.

 

Dave

[SLB8SNK]

I thought powertrain was motor, trans and anything else related? Is it just the motor?

[Golive093]

I bought an extended warranty. It covers everything for 7 years (4 years after the 3/36000). It was only $800. Only catch is I can't go over 36,000 miles, which isn't a big deal seeing my 2001 Lexus only has 8100 miles. It even has roadside assitance..Well worth it with Ford's past history....

[Alloy Dave]

I thought powertrain was motor, trans and anything else related? Is it just the motor?

No, it's more than the engine as you alluded to...but it doesn't cover a gazillion other items such as heating systems, A/C, power window switches, brakes, interior, instruments, and there are likely even some gray areas about what constitutes the engine. For example, are the engine mounts part of the engine? Not sure...all I'm saying is that you can't look under the hood and draw a line where the powertrain ends and the rest of the car begins.

 

Dave