Did you know that approximately 69 million vehicles break down annually in the United States? Breakdowns most commonly occur in older vehicles and are usually due to alternator issues or a dead battery.
Whether you have an older or newer vehicle, having the right extended warranty coverage is a crucial part of auto care. Having this coverage allows you to address minor issues before they become big problems. However, with so many coverage options available, it can be overwhelming to know how to choose the best one for your situation.
Luckily, you’ll just need to keep reading this guide to learn everything you need to know about choosing extended warranty coverage!
Decide How Much Coverage You’ll Need
Your first step is deciding how much coverage you need. If your car is still new, it will be covered by a factory warranty from the manufacturer, which covers most mechanical problems.
Also, a used car can come with a limited warranty from the auto company you purchase it from.
However, if your car is older and your warranty is expired, you’ll need to figure out how you would pay for a significant repair. Do you have an emergency savings account? Could you reasonably spend substantial money to repair a major system failure?
Major system failures that involve rebuilding or replacing an engine or transmission can cost between $4,000 and $6,000. In addition, you’ll also need to pay for basic auto maintenance and auto services to keep your car running smoothly.
If you can’t afford these major repairs, a full coverage extended warranty like the Endurance car warranty plan may be your best option.
If you’re able to pay for vehicle services and vehicle care, like a new alternator, then it’s best to look at the history of the make and model of your car. If your car model is known for having specific issues after 100,000 miles, you may need an extended warranty.
Do Online Research and Read Reviews
Next, you’ll need to choose 3 to 5 companies from your Google search and read their reviews. Be sure to read both positive and negative reviews, and pay attention to how responsive the company is to these reviews.
Look for comments about the claims process, payment options, and the quality of their customer service. You can also find car warranty review sites through a quick Google search. Review sites like Trustpilot and Marketwatch can provide reliable information about various warranty plans.
It’s also good to check the Better Business Bureau for reviews, ratings, and complaints about the companies you’re considering.
Finally, review the company websites to get a good overview of their warranties and check for customer testimonials.
Get Multiple Quotes
Once you’ve narrowed down your list to three companies, you’ll need to get quotes from each of them. Keep in mind you’ll need to contact the company directly for this information instead of going by what you see online.
Typically, extended warranty costs include a down payment, monthly payments, and a warranty deductible. They’re also based on different factors, such as:
- Mileage and your car’s age
- The make and model of your car
- Overall condition of your vehicle
- Level of coverage you choose
- Where you live
- Whether your car has high-tech electronics like GPS or seat controls
- The type of deductible you choose
- Specific policy fees like online claim fees and cancellation fees
It’s also wise to get multiple price quotes for different types of warranties. For example, bumper-to-bumper coverage will usually cost more than basic powertrain coverage.
Finally, if you choose coverage for a more extended period, your total premium will usually be much more.
Read the Terms and Conditions Carefully
Don’t forget to read the terms and conditions of each policy and compare the details of the policies you’re considering. Neglecting to do this could result in you being denied coverage because you didn’t follow specific rules and regulations. You could also end up paying unexpected fees.
Also, additional coverage, like roadside assistance coverage, is essential to a solid warranty policy. You’ll also need to ensure the company has a toll-free number you can call 24 hours a day, 365 days a year.
You’ll also need to check other details, such as:
- Waiting periods
- Canceling coverage
- Making claims
- Transferring coverage to another vehicle
- If there is a money-back guarantee if you cancel your policy within 30 days
- If the company. pays the repair facility directly or expects you to pay first
- If vehicle repairs can only be at certain auto shops
- If they offer car rental coverage
Check for Exclusions
Finally, you must be aware that many extended warranty policies contain exclusions.
Some policies require you to comply with the manufacturer’s suggested maintenance schedule, or you could be denied coverage.
Other companies have coverage restrictions and payout limits. For example, if you have a flat tire, the company may only pay up to $100. You’ll then be responsible for paying the rest of the bill.
Also, you’ll need to be aware of companies with “wear and tear exclusions” in their policies. Companies with these exclusions usually only cover repairs caused by a mechanical breakdown. Many times, exclusions are for parts like struts, piston rings, and valves. Some of these components are expensive and will wear out over time.
Additionally, you’ll also find over-heating clauses and exclusions. Overheating is a common cause of many major mechanical issues that cause a car to break down. Some policies will exclude covering damage due to overheating.
Finally, some warranties don’t cover older ABS braking systems since these systems are expensive to replace or repair.
There are also many other exclusions that can come with extended warranty plans. Be sure you take the time to understand what the policy covers and doesn’t cover before purchasing coverage.
Extended Warranties and Auto Care
Now that you know more about choosing extended warranties for your auto care needs, you’ll better be able to find a policy that works for you.
Be sure to take your time when searching for extended warranty policies. Don’t hesitate to ask questions and get all the necessary information before committing.
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