Extended Car Warranty

What's a Extended Car Warranty?

Most new cars purchased these days come with a car warranty - this is an agreement between the service provider and you that should anything break, malfunction, or otherwise go wrong with the purchaised car within a certain period of time, - typically 3 years or 36,000 miles, whichever comes first, then the manufacturer or car dealer will repair or replace the component at absolutely no cost to the buyer.

Extended Car Warranty (also known as extended car warranty plans) are designed to offer similar peace of mind by literally extending the length of time a customer can expect to receive such car warranty coverage.

Extended Car Warranties

Once you take an Extended Warranty For Cars, you effectively enter into a legal agreement with the company to take care of all the repair and maintenance costs that would be incurred by you for a specified period of time. You can easily compare this extended car waranty coverage to health insurance taken by individuals to protect themselves from unforeseen medical expenses. It becomes all the more important to get extended car warranty if you plan to buy a second hand car or used car that has run out of original car warranty. Though this cover reimburses most of the repair costs, it does not take tires, brake pad and seat belt into account.

What details should I make sure an extended car warranty?

• Money back guarantee - If you are going to purchase an extended auto warranty, make sure that you are given some sort of review period with the contract. This will ensure that you will be satisfied with the plan, or else you can cancel for a full refund within a certain number of days. Most extended car warranty plans will give you at least a 30-day money back guarantee period.
• Backed by a reputable insurance company - As discussed earlier, find out which insurance company is backing your extended car warranty plan. Ask them what the insurance company is rated.
• Low deductible option - If you are going with a long-term extended car warranty plan you want to get the lowest deductible possible. It is not unlikely that you may use this plan at least once per year. If that's the case, a large deductible can add up quickly. Go with a reasonable deductible, if any. However, if you are going with a shorter-term plan, and less coverage, a higher deductible can bring down the cost for your extended car warranty. Since you are only shielding yourself against major repair costs anyway, a larger deductible will not hurt you here.
• Transferable - If your extended car warranty is transferable, you have the option of transferring the warranty should you ever sell the car, or give it to someone. This would clearly add to your car's resale value becasue the car is still protected by an extended car warranty, and, therefore, considered less risk present.
• Pro-ratable - You never know what is going to happen to your auto in the years to come. Some extended car warranties can last up to 7 years, and the chance of you having your vehicles at the end of those seven years can be slim. Whether you may sell the car, trade it in, experience a crash resulting in the car being totaled, or theft, pro-ration gives you the opportunity to get out of your contract with a refund. A pro-rated refund determines what amount of extended car warranty you have left at the time you cancel the contract, using either the time elapsed or mileage accumulated, whichever is greatest. The refund can be sent to you in the form of a check, or put toward a new car service contract.
• Benefits - Almost all extended car warranties come with additional benefits to the regular protection. The range of benefits can be found earlier on this page. Although these benefits may seem rather mundane in terms of affecting your decision process, these benefits can be very useful and should not be over looked. Take the time to find out exactly what each extended car warranty plan offers.
• Pays repair facility directly - One of the main reason you are purchasing a extended car warranty is to avoid the hassle and haggling that is common between mechanics and consumers. When you enter in a vehicle service agreement, you now have a claims department team that will be dealing directly with them. Any issues that arise will be settled between them. For this reason, you want to stay out of the process as mush as possible. Allow them to come to an agreement regarding any matters, and make sure that your extended car warranty pays the repair facility directly. The last thing you want to happen is to put the money up yourself, and then get into a disagreement with your own claims department about what the repair costs should have been.
• Options for payment of plan - Extended car warranties can be a very valuable instrument in your life, but they can also be expensive. If you can't afford to pay for your warranty plan up front, see if there are any payment options available. Many extended car warranty plans now come with zero percent financing. One very important thing to ask before entering into a payment plan is what will happen if a claim arises and I haven't finished paying off the plan yet. Some warranty companies will only pay a claim up to the amount you have put into it so far. Make sure you resolve this question before signing up your extended car warranty contract.

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