Tips for Buying an Extended Vehicle Warranty

By the DoItYourself.com Staff

Buying a car is a big decision, and a major purchase. Other than the roofs over our heads, the car, truck or SUV in the driveway is perhaps our most valuable asset. Keeping that asset protected is an important consideration, and one way to provide that protection is to purchase an extended warranty.

The purpose of the extended vehicle warranty, of course, is to provide continuing protection for the owner of the vehicle after the normal manufacturer’s warranty has expired. Keeping the vehicle running properly and well repaired is one of the most important ways to make it last, and the purchase of an extended warranty can help solve the problem of where the money for those repairs is to come from.

Of course it is important to find out exactly what is covered, and is not covered, by that extended vehicle warranty. It is essential to read the fine print carefully in order to determine just how much protection you are getting for your money.

There are a number of different organizations that sell extended automobile warranties, and it is important to choose carefully. One of the most intelligent ways to buy an extended warranty is to go directly through the seller of the warranty. It is important to know, for example, that car dealers themselves do not originate extended warranties. Instead, they simply resell the warranties that have been written by other companies.

When the extended warranty sale goes through the car dealer, they generally make between $500 and $1500 on the sale; money you could potentially save by buying the extended warranty directly. The name of the company providing the warranty can generally be gleaned through a careful examination of the paperwork in the dealer’s office, and a little bit of detective work can save you lots of money.

Since buying a new or even a used vehicle often requires a large up front outlay of cash, many buyers are left without the fund needed to pay for the cost of an extended warranty. One way to come up with the needed cash is to use the new car rebate to make the purchase. If you are due a rebate, put that money aside and use it to purchase the extended warranty you want directly from the warranty seller.

Of course it is important to thoroughly research the company that is providing the extended warranty in order to ensure that they are financially sound, and that they will be able to live up to the promises they make. An extended warranty is in essence an insurance policy, and the rules for insurance shopping apply here as well.

Buying an extended vehicle warranty means dealing with two different companies. The first company will be the one who sells the extended warranty contract, while the other company will be the one who administers the claims. It is important to choose a well funded company for both the seller and the administrator of the warranty product.

As with any purchase, it is important to thoroughly read the warranty paperwork in order to ensure that you are getting what you think you are. It is important to look carefully at the fine print, including any exclusions or mileage limitations. Some extended warranties are only available if the vehicle has less than a specified number of miles, so be sure to watch your mileage and make your decision accordingly.

It is important as well to thoroughly review the claims process and to be sure you understand it before you purchase the warranty. Some extended warranty companies make filing a claim easy and straightforward, while others require customers to jump through a complex series of hoops in order to get the money they are due.