Automobile Warranty

Interstate National Dealer Services, Inc.

Guide to Automobile Warranty

Purchasing the right extended auto warranty cure for repair headaches
By Michael Berman

When purchasing a new or used car, more than likely you will be offered an extended automobile warranty that will pay for repairs to the car after the manufacturer's auto warranty runs out. Purchasing the extended automobile warranty at that time can save you from scrambling to find an extended automobile service plan when the auto service contract runs out.

Unfortunately, not all extended auto warranty providers offer the same types of policies. The best automobile service plan will offer:

1. True bumper-to-bumper vehicle warranty services, which includes everything that can wear out or break down.
2. A claims reserve account, which is where the extended auto warranty provider deposits funds to ensure your auto warranty claims will be paid.
3. No deductible for individual repairs or parts covered by the extended auto warranty.

Action Steps

The best contacts and resources to help you get it done

Compare automotive extended warranties You can find a discount extended car warranty or companies offering complete vehicle warranty services online (except in California).

I recommend:  Make sure you have all the facts before signing with a discount extended car warranty service. If the salesperson tries to rush you or can't satisfactorily answer you questions, it's time to move on. Companies such as SmartAutoWarranty and AA Auto Warranty provide instant quotes for automotive extended warranties online, or you can speak with a service representative. AAA members also get discount warranty coverage.

Buy an automobile warranty from your dealer Although this can be more expensive than purchasing an extended warranty directly from a warranty provider, you have the assurance that your vehicle model is covered.

I recommend:  Check with your dealer to see if he offers extended warranties for your car. A few that do are GM, Ford, and Chrysler dealers. Unfortunately there are many car models that are hard to insure for repairs. These include automobiles with turbo-charged engines; 10- and 12-cylinder engines and vehicles that have a reputation for being expensive to repair such as Porches and BMWs.

Know your basic coverage vehicle warranty services Almost every automobile sold today comes with some warranty coverage, but coverage differs from manufacturer to manufacturer.

I recommend:  CarSmart.com and WarrantyHelper show you basic warranty coverage for all of the automobile manufacturers.

Cover used cars with extended vehicle warranties, too There are several extended auto warranty providers that can cover you if you've purchased a used vehicle.

I recommend:  Since used vehicles often come only with what's left on their warranties or nothing at all, it's a good idea to purchase coverage. A couple of the more reputable companies offering used car coverage include Warranty Direct and CarChex.

Tips & Tactics

Helpful advice for making the most of this Guide

• If purchasing a used car, find out if there is any warranty coverage left on the vehicle.
• Find out who is backing the warranty coverage you're purchasing. It may be the automobile manufacturer, a third-party or an insurance company.
• Make sure the warranty coverage you purchase will pay the repair shop directly and will allow you to use any repair shop, including your dealer, without qualification or pre-approval of the repairs.
• Make sure there are no hidden costs, such as deductibles for every part replaced or other charges.
• Know exactly what is, and is not, covered.