My extended warranty buyer’s guide will teach you everything you ever wanted to know on how to find, research, select and purchase a new or used car extended auto warranty. Also known as vehicle service contracts when offered by a third party, these types of contracts can vary greatly in price, coverage, or both.
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By law, the maker of the product (vehicle) is the only one that can provide you with warranty coverage and refer to it as such.
When coverage is provided by a third-party service provider, it is considered an after-market product. These types of policies go by different names, such as vehicle service contracts, extended service agreements, or mechanical breakdown agreements.
An extended warranty is a contract stating the warranty provider will repair or remedy any defects or damage when something breaks on the vehicle within a certain period or mileage. The seller will repair the vehicle and there will be no cost to the buyer unless otherwise stated in the contract agreement (deductible may or may not be required).
NOTE: Many times the dealer owns the company providing the extended warranty policies they sell. Car dealers make a ton of money selling extended warranties, it’s all a numbers game. Dealers sell way more policies than claims being made. This in turn makes for a profitable product. There are coverage plans are available for new and used cars alike. Keep in mind, If you buy a warranty for a new car, it will run concurrently with the manufacturer’s factory warranty. If you have a repair that’s covered the manufacturer’s warranty will take precedence until it has expired.
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The golden rule to buying an auto warranty is to research what’s covered and what’s not covered by the policy. You will find this information on the warranty contract, normally found somewhere on the back in the fine print.
Instead of paying too much at a dealer, I recommend contacting online third-party extended warranty companies such as Complete Car Warranty. This company provides you with extended warranties, legally named extended service contracts, with equal or better coverage at a lot cheaper price than what the dealer will charge you.
Olive Mechanical Breakdown Insurance allows you to submit your vehicle’s information to receive free, no-obligation warranty price quotes. No games, gimmicks, or high-pressure tactics … just straight-up coverage options from top administrators within the industry so you can decide on which level of protection is best for you. Once you’ve received your quotes, you can use them to leverage yourself when negotiating a warranty with a dealership.
Complete Car Warranty offers free no obligation quotes and a broad range of coverage. Get full protection for up to 60% off of dealer prices when you go direct.
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Olive Mechanical Breakdown Insurance offers a quote in 60 seconds, easy monthly payments, cancel anytime and you can manage 100% online. No robocalls and no human interaction required.
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Vehicle technology is moving at an incredible pace, the repair costs for that technology are moving just as fast. There are some situations when purchasing an extended warranty will be a waste of money and other times when you should consider protecting your investment. Keep in mind that one costly repair could pay for your policy.
Reasons to think about purchasing an extended warranty:
Most new cars sold have a comprehensive bumper-to-bumper warranty that covers the whole vehicle for at least 3 years or 36,000 miles (excluding consumable items such as clutches or brakes).
Why you may not want to buy an extended warranty:
No matter what situation you’re in, a dealer will attempt to sell you an extended service contract. They don’t care if you’re leasing or you trade your car every two years. All they want to do is put another “warranty sale” on the board. The decision to purchase coverage for your vehicle is ultimately up to you. If you’re still undecided if you should purchase a policy or not, here’s some auto warranty buying questions to ask yourself.
