How to Choose an Extended Auto Warranty
When you buy an automobile, most cases you will be asked about obtaining an extended auto warranty. You might think that this is a good idea and accept the warranty. Often, it is a good idea, and your vehicle coverage is without problems. Unfortunately, this is not always the case, and there are pitfalls that you should know about.
- Read the new or used car warranty. Go over it with a fine-tooth comb to ensure you understand the document. If you do not understand the document on the first reading, read the information over until it makes sense. After you read it, you might realize that this warranty comes with many exclusions clauses and is useless.
- Pay special attention to the wear and tear section. Your definition of wear and tear might be entirely different to the warranty. Inquire about the wear and tear definition from the warranty provider. If your vehicle warranty indicates coverage only for the power train, this is a red flag because seldom the power train do not fail. Exclusion of an automatic transmission is another red flag because replacing a transmission on your own is a major expense, and you want it covered under an auto warranty.
- Check out websites and consumer magazines that give information on your vehicle repair rate. If your vehicle requires repairs often and you plan to own it for a long time, choosing an extended auto warranty might be a good idea. If you only keep your car for a short time, do not bother with the warranty.
- Look for extended vehicle warranties issued by third party agents. Often third party warranty companies pay more than what you find with a car dealer. Be careful with these companies because many agents are unscrupulous.
- Instead of buying an extended auto warranty, you could instead establish a special savings account to deal with the emergency auto repair that occurs. This way you do not have to worry about paying for car repairs.