To Buy or Not to Buy? Extended Warranty Tips

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This is a question many of us face as we near the termination of the factory warranty or if we are buying a used vehicle.  There are different companies, some who will be pushed by the dealership who sold you the car because there are incentives that are given to the salesman at the dealership for selling these 3rd party contracts.

Some people choose to shop for their own warranty. I like this idea because it’s usually a more affordable than if you pay through the dealership. However, there are a lot of really sketchy companies and usually these outfits have a lot of bad reviews that can help you weed them out. Take your time and do your research. Once I was given authorization to do an $800 repair on a jaguar by a company. The next day when I submitted my payment request they were gone!

Having dealt with many contracts at our shop, I would recommend a top notch warranty company and only purchase it if you know that your vehicle is likely to cost a lot and probably break down more than the average car. In other words, if you drive a Lexus, Toyota, Nissan, Honda, don’t bother! Jaguar, Land Rover, Range Rover, Audi, go for it!   Not putting these cars down, they just seem to cost a bit more to maintain. I don’t think that’s a shocker.

The other part in considering a warranty is level of coverage.  Don’t waste your money on a mid or low level “power train” warranty.  The term Power-train refers to the internal engine components, transmission etc. It may cost several thousand dollars and they will only cover catastrophic failure. Well..I say “cover”, I promise you they will want to see every single oil change receipt, and even if the transmission fails, they still; may not cover it for one reason or another.  We have had a warranty company ask us to completely dismantle a bad transmission to the point of failure.  Once we determined it was internal bushings, they stated that it was due to wear and tear and would not cover it. Don’t be discouraged, the customer fought back but it was a big hassle.  If I were to purchase one, it would be the highest level, usually referred to as platinum coverage. The reason for this is the cost of general breakdowns is where you will see the warranty pay off. Repairs that involve air suspension, cooling systems, heating and air conditioning repairs, and so on. Because the coverage is tiered it should also cover the basic coverage such as engine and transmission failure.

Just remember most contracts never cover service items, or other parts such as emissions repairs, exhaust systems, catalytic convertors, brakes, belts, hoses, and other repairs that are designed to wear. I hope this helps!  – Neil D

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