Extended Auto Warranty

Warranties...Health
Insurance For Your Car!

The who, what, when, where and how to buy an extended auto warranty. Your questions answered, massive savings revealed and warranty scams avoided.

Extended warranties seem pretty simple on the surface...Your car breaks down, you bring it to a mechanic, your warranty company pays for the repair and away you go...

An extended auto warranty is like having a health insurance policy for your car and when you need it to get fixed, you expect them to be there for you.

Unfortunately, there are a lot of scams and fly by night warranty companies out there.

I am personally a big fan of extended auto warranty coverage and always buy a warranty when I'm buying a new/used car.

That being said, I don't mean to say that all warranties are created equal. I certainly don't feel you should buy whatever coverage is offered to you.

Choosing an extended warranty is an important decision and in order to get the best extended auto warranty coverage you'll definitely want to do a little research and be sure to ask the right questions.

Below you'll find my list of 12 essential questions to ask prior to buying an extended auto warranty and a heads up as to what kind of mark up car dealers have on their warranties.

Quick Links - Additional pages of interest:

Best New Car Warranties Comparison
My top 7 picks for best new car warranty and a complete comparison of all manufacturers new car warranty coverages. Who's the best? You decide...

Factory Extended Warranty Overview
The factory built it, so it stands to reason that they'll offer the best extended warranty coverage, but they'll make you pay for it...Or will they?

Vehicle Extended Warranty FAQ
Here are some of the most common questions I receive from visitors to this site about extended warranties, plus specific questions about GM warranty plans.

GM Extended Warranty (GMPP) Info & Quotes
GM warranty, more specifically GMPP, information and Never Pay Retail quotes available for your Chevrolet, Buick, Pontiac, Cadillac and all GM vehicles.

GMPP even offers coverage for non-GM vehicles. Wait until you see these prices, we blow away the competition! Plus links to online brochures.

12 Essential
Extended Auto Warranty Questions

1) What's the AM Best rating of the insurer?
I'd recommend only companies with an A-(excellent) rating, or better, and with a stable outlook. This rating is an indication of the insurers financial strength.

2) When does the time start?
You'll want to know if the time starts from the date the warranty contract was purchased or if it begins when the car was first purchased.

When the car was first purchased is also known as the in service date.

3) When do the miles start?
You'll want to know if the miles start from the current odometer reading or if the miles start from zero.

For instance, if you were looking to buy a 75,000 mile extended warranty, would the contract expire when the odometer reads 75,000 or would the 75,000 be in addition to the current odometer reading.

4) Is this day one coverage?
This would apply to used cars with no factory warranty remaining. If your car breaks down an hour from now are you covered or is there a waiting period, i.e. 30 days and/or 1,000 miles before you can use the coverage.

5) Is it an exclusionary coverage or stated components coverage?
Exclusionary is a better, more complete coverage and it's easier to understand what is and what is not covered.

6) How long has the extended warranty company been in business?
The longer the better!

7) Is the coverage good nationwide? and at the mechanic of your choice?
Make sure the coverage is good throughout the country (usually Canada as well) and not just at the dealership you are buying from.

A good warranty will also allow you to have the car repaired at the mechanic of your choice. The only requirement should be that the repair facility be ASE certified.

8) What type of deductible, if any?
The standard deductible is $100 and some dealers start at $200. Many people forget to ask this question and are a little surprised when they have to come out of pocket come repair time.

9) Are there lower deductibles available?
Typically a deductible can be lowered (for a fee) to $50 and in most cases down to $0.

10) Is the deductible paid per repair or per visit?
If your car has three repairs that need to be made on the same visit will you have to pay $100 for each (total of $300 out of your pocket) or will $100 cover all three.

11) Will they pay stated labor rates?
This is important to know, because if they use a different calculation to figure how they pay labor costs, then you could have to come out of pocket to pay additional labor fees.

For instance, the repair facility has a stated labor rate of $100 per hour and the extended warranty company will only pay $80 per hour. Your stuck paying that $20 hr difference.

12) Will the warranty company pay the repair fees upfront or will they reimburse you?
Most warranty companies will pay the service department by credit card at the time the repair is made and this is the preferred method of payment.

I would suggest staying away from companies that would reimburse you after the repair has been done, it can be a headache.

I'd also highly recommend not buying mechanical break down insurance (MBI) it's nowhere near the coverage you'd have with an exclusionary extended auto warranty coverage.

These questions are so important, because even reputable dealerships have unknowingly sold warranties backed by companies that eventually folded.

This means that the $1,500 warranty you just purchased has now been reduced to a very expensive piece of paper with zero value to you and/or your car.

Avoid Over
Paying At The Dealership

The best way to avoid over paying for an extended auto warranty is to go prepared. Get a few quotes online, so that you know what to expect as far as pricing is concerned.

If you talk to the dealer and find that their pricing is way out of line, then look elsewhere.

Most online warranty companies I've found will offer 0% payment plans at no cost to you.

This will help you to eliminate any stress as to how you can pay for the coverage. In fact, at 0% you'll probably save additional money.

Keep in mind the average mark up I've seen is roughly $900 or more.

When the dealership allows the Finance Manager to set the extended auto warranty prices, then I've seen warranties marked up as high as $2,500.

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