It is common for auto salespeople to up-sale customers by convincing them to purchase vehicles with bonus features that enhance the driving experience. While opting for the sunroof, rims, and wood interior may sound appealing, be prepared to pay more for the vehicle. Aside from interior or exterior features, car salesman will also try and sell their customers an extended warranty. All vehicles are sold with a basic warranty, which covers a limited number of repairs for a short period following the purchase. However, car buyers may select longer coverage for an additional fee. Before signing an extended warranty contract, carefully read the document and fully understand the stipulations.
How Long is the Extended Warranty Effective?
There are different time frames for an extended warranty. Longer warranties cost more. Car buyers should select warranty time frames based on the number of years they intend to keep the car. For example, buyers who purchase new cars every two years should not select 60 month warranties. On the flip side, if a buyer plans on keeping the car for several years, shorter warranties may be worthless.
Is There a Mileage Cap?
Yes. The majority of extended warranties stop coverage on the vehicle once 100,000 miles are reached. On average, it takes a vehicle approximately eight years to reach 100,000.
What Does an Extended Warranty Cover?
Each extended warranty is different. Thus, buyers must read the contract carefully and ask questions. Extended warranties cover automotive repairs. However, repairs due to wear and tear are not usually covered. For example, if the window stops functioning properly, or problems arise with the vehicle’s engine, the extended warranty will cover the repair cost. On the other hand, brakes and tire repairs would be considered normal wear and tear, and not covered by the policy.
Is There a Deductible?
Even though an extended warranty will cover many major repairs, and possibly save you thousands, most policies do require an upfront deductible. Deductibles are reasonably priced and range from $20 – $100. Some policies charge a deductible per repair, whereas others charge per visit. If possible, choose an extended warranty policy that charges a fee per visit. This way, if the vehicle needs multiple repairs, you avoid paying a higher out-of-pocket expense.
Which Mechanics Can Maintenance the Vehicle?
Cars with an extended warranty can be serviced or repaired by any mechanic willing to honor the warranty agreement. Yet, if a dealership’s extended warranty is purchased, all repairs or services must be rendered by the dealership that sold the policy. Furthermore, regular routine maintenance is required. If a car owner neglects tune-ups, oil changes, and so forth, the dealership or company issuing the extended warranty has the right to cancel the policy.
Are Extended Warranties Cancelable?
Because extended warranties are contractual agreements, there is a penalty for canceling the policy. While some companies charge a huge cancellation fee, other companies refuse to cancel the agreement. Prior to choosing a warranty, inquire about the cancellation policy.