A Buying Guide to Saving Money and Making the Right Choice
It’s easy to understand why Americans buy extended auto warranties. It’s because we want to drive our cars worry-free from expensive repair bills. We don’t like budgeting for repair expenses and we don’t want the burden of paying for an expensive repair bill either. We like to keep our cars in nice condition and we want a safe and trouble-free ownership experience, one that’s not spoiled by unexpected repairs.
A good extended auto warranty satisfies those needs. It pays for the entire repair, including parts, labor, rental, and towing. Auto dealerships love auto extended warranties too. I’ve been told by many service department employees, “Our customers are thrilled when the warranty company pays the bill.”
If you’ve decided to purchase an auto extended warranty, what should you do next? Should you follow the suggestions and plans set forth by your local dealer, or try to find the best warranty plan yourself?
If you try to do it yourself, where would you find the best extended warranty plan? How much coverage can you get? Will it be from a credible company? Can you get a good price?
This Article Can Save You Hundreds of Dollars
In this article I’ll answer those questions for you. I’ll show you what type of warranties to look for and where to find them at discount prices. You’ll know how to find a safe and credible warranty company and you’ll learn how to identify the best coverage available for your vehicle. I’ll give you insight on how much the warranty plans cost and how to negotiate for the best price. You’ll be able to make quick and informed decisions about the merits of your dealer’s offering and how to get the best deal for yourself.
When you finish reading this article, you’ll know more about finding the best auto extended warranty than 99% of all customers who walk in to purchase a vehicle at your local dealership.
Factory or Aftermarket Extended Warranty Plans?
Many dealerships prefer working with their factory programs, particularly if your breakdown is not near your local dealership. Let’s say you are on vacation with your family and your Ford 500 sedan suffers a transmission failure several hundred miles away from home. Any Ford, Lincoln, or Mercury service department in the US and Canada will have your name in the Ford database and will start repairing your vehicle without delay. You’ll get the same service with the GM and Chrysler factory plans too. Dealership service writers and mechanics prefer working with their manufacturer warranty plans because they are familiar with the factory’s procedures. With the factory plans, the repair process usually goes smoothly. This gets you back on the road sooner.
Aftermarket Plans Have Their Advantages
The main benefit to purchasing an aftermarket warranty plan is lower cost to the consumer. Because competition is stronger for aftermarket plans, prices can be lower for extended warranties, particularly on higher mile vehicles. With the lower price, consumers are able to upgrade their coverage level compared to a similarly priced “factory” extended warranty plan.
Some Dealers Like the Aftermarket Plans Too
Many new car dealerships who offer aftermarket warranty plans as a first choice do so for the additional profit opportunities. Unlike the factory plans, aftermarket warranty plans are known to pay higher labor rates for their mechanics and retail parts pricing for their parts department. In addition, many insurance companies offer special investment programs to make their aftermarket plans more enticing for the dealers to offer to their customers.
Buy at the Dealership or Shop Online?
If you’ve decided on a factory warranty plan, buying it online is probably the right choice. Since all franchised dealerships from one manufacturer service the identical factory extended warranty plan, shopping online to save money makes good sense. GM, Ford, and Chrysler have authorized dealerships to sell online and to assist you with discount pricing. These outlets can help you avoid overpaying at your local dealership.
Remember, factory-plan online outlets can only provide extended warranty plans to your vehicle if you have a portion of your full-factory warranty remaining. If the full-factory warranty on your vehicle has expired, an aftermarket extended warranty plan from a good local dealer who runs a credible business and cares about customer service should work well for you. If you feel your dealer’s warranty plan prices are too expensive, just say NO. Several good aftermarket and factory warranty programs are sold online at discount prices.
How to Find a Good Company
If the lower price of a good aftermarket plan interests you, make sure the company has credible insurance backing. The insurance company’s name and contact information will be clearly written in the extended warranty policy. Verify this information before you purchase. It’s also a good idea to check the insurance company’s financial rating. AM Best Reports provide financial report cards for US insurance companies. Look up your insurance company and be sure their financial rating is A+, A, or A-. Avoid aftermarket warranty plans with a low insurance rating or no insurance backing at all.
Make Sure Your Company Is Rated “A” with the BBB
If you’d like to know more about the character of your aftermarket company, the Better Business Bureau is a good source for reports of customer service and satisfaction. The BBB report rating will provide you with answers to the following questions;
1) Do customers receive prompt answers to their questions when inquiring?
2) Do customers receive efficient claims service on auto repairs?
3) How well does your warranty company handle customer complaints?
Most customer dissatisfaction from extended warranty plans originates from repairs not covered or denied by the warranty company. If you want to be certain your warranty company provides great service, look them up through the Better Business Bureau. It’s the starting place where most troubled customers express their complaints. Search the BBB here. Extended auto warranty companies with an “A” rating from the Better Business Bureau are exceptional, especially considering the nature of the auto extended warranty business. Aftermarket extended warranty companies given an “A” rating from the BBB are rare and probably safe to do business with.
What You Need to Know Concerning Coverage
The Final Details