Purchasing an Extended Auto Warranty
There are many things to consider when purchasing an Auto Warranty Policy with Extended Service, such as price, ease of use and more importantly what it would cover. You may purchase the vehicle warranty from the dealer, or from an outside source. What most consumers need to remember is that auto warranty policies are like insurance. Insurance is always handy to have in situations like accidents, weather related incidents, such as hail storms or slippery roads, but what happens when your alternator goes out leaving you stranded? Isn't it nice to know with one phone call you can arrange the car to be towed to the garage, get a rental and a ride home?
Price is an important factor but should not be the final decision maker. The lowest priced insurance is not always the best choice and this is true with extended warranties also. Many no-name companies spring up almost overnight and borrow from Peter to pay Paul, meaning current premiums go towards paying the more recent claims. This is a practice that companies cannot keep up for long, which means that company will fold, and your warranty will not have any worth. Buying a warranty from a dealer is not always the best choice either. If the dealer goes out of business and you are beholden to that dealership for you warranty and maintenance work then again you are without a valid warranty. Often there is a scam where the auto warranty is sold to the consumer and then canceled by the dealership for a full refund which the consumer will never see. This is not meant to discourage the buying of an auto warranty, not at all. Just proceed with a word of caution. There are many companies that maintain ratings of extended warranties for consumers to verify before they buy, a quick internet search will bring up this information.
For many people who are offered the automotive warranty service at the time of purchase of a new vehicle the primary motivation is the ability to finance into the note of the car, although it is usually at the same APR as their car loan. There are many companies that do offer 0% APR and a shortened loan period. For those consumers who did not purchase a vehicle off the showroom floor but perhaps one off an individual or off the pre-loved side of the dealership, there are often companies who will provide a warranty for vehicles with higher mileage. There are also many companies that will handle higher end cars, which most of the lower priced, lower end auto warranty companies will not do as they do not want to pay for the higher cost of repairs on most luxury cars.
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