You Get The Best Value For It.
Where Do You Want Auto Warranty To Go Today?
What Does the Contract Cover?
There are two types of extended warranty coverage typically offered: inclusionary and exclusionary. An inclusionary warranty only covers items that are specifically listed in the contract. An exclusionary warranty will have a detailed list of those items that are not covered by the agreement.
In general, you want to have an exclusionary contract.
Even then, you’ll want to go through line-by-line to make sure that expensive items that may fail are not excluded. Exclusionary policies will typically come with higher price tags than inclusionary policies.
Note that the brochure or sample contract for an extended warranty or service protection policy is not the actual contract – it’s just marketing. Insist on seeing what is shown on the actual agreement before you agree to purchase any vehicle protection product.
Where Can I Get My Car Serviced?
The question of where the warranty is honored is critical. Are you limited to one specific repair facility or dealership? What happens if your car breaks down if you’re traveling? Can you go to any of your car brand’s franchised new car dealers for service?
Don’t make any assumptions, because if the dealer goes out of business or for some reason you no longer want to get it serviced at a specific place, your warranty could be worthless.
Those details should be spelled out in the contract. If you can’t get a good answer, you should consider it a red flag.
Who Is Backing the Warranty?
You’ll want to know who is behind the warranty coverage. Some extended warranties or service contracts are backed by auto manufacturers. This is especially common with the extended warranty coverage you get when you purchase a certified pre-owned car. Other warranties are backed by independent companies that have no relationship with either the dealer or manufacturer. Before you sign a contract with a third-party warranty company, you’ll want to spend some time online checking them out to see what other customers are saying and whether there are any consumer complaints against them. If they go out of business, your contract will likely be worthless.
When Can I Buy an Extended Warranty?
Often when a dealer’s finance officer is trying to sell you a service contract, there will be pressure to “buy today to get a deal.” The truth is, you can generally buy an extended warranty at any time during the vehicle’s life, as long as the car does not have exceptionally high mileage.