Extended Warranty Info

Questions to Ask
Before You Buy Car Warranties

Extended Warranty Info - Before you hand over hundreds, possibly thousands, of dollars to buy a car warranty, there is certainly some extended warranty info you'll want to know.

Here are the 12 most important questions you'll want to ask prior to buying:

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 vehicle 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 vehicle extended warranty coverage and it's easier to understand what is and what is not covered.

Many people have had bad experiences, because they did not know this valuable piece of extended warranty info prior to buying.

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. The best vehicle extended warranty coverages will offer one deductible per visit.

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 vehicle extended 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 vehicle extended warranty coverage.

It's vital to have all the extended warranty info you can before making this big purchase. These questions are so important, because even reputable dealerships have unknowingly sold warranties backed by companies that eventually folded.

This means that the $1,000, $1,500 or even $2,500 (or more) warranty you just purchased has now been reduced to a very expensive piece of paper with zero value to you and/or your car.

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