What is an extended auto warranty? That is what I wanted to know before embarking on this new adventure of purchasing one. When you own any vehicle, the odds of having mechanical breakdowns are high. People combat this risk by purchasing an extended auto warranty to protect them from the high cost of mechanical repairs. There are other reasons to purchase an extended auto warranty. Your vehicle is one of your biggest investments. An extended auto warranty will ensure it is always in the best mechanical condition. The production of cars today are very complex and at times one repair will cost more than buying an extended auto warranty will. Hourly labor rates can top $90 per hour in some markets. Many warranties are transferable and will increase the resale value to potential buyers. Who wouldn't want to own a vehicle that comes protected from repair bills? Many buyers think if they buy an extended auto warranty before the manufacturer's warranty expires that they will have double coverage. What really happens is they extend the term of the auto warranty that the manufacturer provided on the vehicle. Once the manufacturer's warranty expires, the extended auto warranty takes over to protect you from the unexpected. It is extremely important to buy it before your original factory warranty expires because this is when it is the least expensive. The longer you wait the more it will cost.
Watch out if you are told that you must purchase an extended auto warranty in order to qualify for financing. This does not make sense because it would increase the amount you are borrowing by adding an extended auto warranty in order to obtain financing. The only way financing is granted is based on credit. By including the extended auto warranty in your car purchase, you will be stuck paying all the additional interest.
Upon purchasing your extended auto warranty, your car needs proper maintenance. It is important to keep accurate maintenance records and receipts. If this responsibility gets neglected then it could jeopardize your claims on getting paid and put the claims at risk. An all extended auto warranty requires that you properly maintain your vehicle and perform the manufacturer's recommended maintenance.
Knowing who will be administering your extended auto warranty can give you insight into the strengths and weaknesses of the contract you're considering. Administrators act as claims adjusters, authorizing the payment of claims to the service repair facility under the contract. Manufacturer-backed warranties score very highly when it comes to ease of use. Remember, third-party extended auto warranty providers are often less expensive and offer broader coverage. If you decide to purchase a third-party warranty, make sure they have the financial resources to meet their obligations under your contract. The ultimate measure of a warranty company is ensuring that your claims are paid quickly and easily. There are many Web sites offering warranties today. Prices vary considerably as do coverage's. Only a couple of Web sites are direct administrators of the warranties. Remember, it is the administrator (the company that pays your claims) of the warranty that you should thoroughly investigate. Good luck purchasing your extended auto warranty!