Common questions on extended warranty:
• Is the extended warranty transferable?
Some warranties end when the person who bought the extended warranty sells the car. An extended warranty that allows you to transfer it to a new buyer is preferable; it's also an excellent selling point for prospective buyers when you decide to sell your car.
• Can repairs be performed at any repair shop?
A few warranties require that repairs be performed at the dealership from which the extended warranty was purchased; this can be limiting and inconvenient. You want to look for an extended warranty that gives you more than one service facility to choose from. You'll appreciate this if the vehicle ever needs service while you're on a road trip, miles from home.
• What exactly is covered on an extended warranty?
Know what's covered -- and what's not covered -- by the extended warranty you're considering. Does the contract cover breakdown as well as wear and tear? Under a "breakdown" extended warranty, coverage is extended only to parts that break down. Not all parts fail due to breakage; some parts need to be replaced because they've worn down over a period of time. A "wear-and-tear" extended warranty extends coverage to worn-down parts in need of replacement. There are some simple entry-level contracts that don't cover anti-lock brakes and many of the luxury options common in today's vehicles. If your vehicle has this feature, you should consider upgrading to a higher level of an extended warranty. One thing to remember is overheating isn't covered in extended warranty. If overheating occurred due to problems with an expensive part such as your radiator, you'd be stuck with a hefty repair bill.
• Will my dealer accept a third party extended warranty for repair?
The marketing and sales of an extended warranty has moved beyond the ttraditional car dealer channels. Dealers not only offer the manufacturers extended warranty, but are now offering a third party extended warranty as well. Most third party warranty companies pay the repair facility immediately over the telephone by credit card, so there should be no objections about accepting the warranty. In fact, a warranty from a third party will require the dealer to do less paperwork and not wait for reimbursement.
• Will my service contract automatically be in effect as soon as I pay for it?
The company who underwrites the extended warranty service contract is completely responsible for making sure the terms and conditions are met. The seller of the contract bears no accountability, so the consumers should call the contract underwriter, and not the dealer, within 30 days for confirmation that the extended warranty application has been submitted and is approved. If it is by a service contract company then you should get a plastic ID card or some type of identification. If you have not heard from them, you may not be covered.
• Where is the best place to get information on extended warranty?
The best place to look for information is always on the Internet and through asking friends how they went through the process of getting covered on their extended warranty.