What Some Car Warranty Companies Don't Tell You
Car Warranty Companies are not all created equal. Here, we’re going to talk about the sin of omission. We all know that salespeople focus on the positive and prefer not to discuss any negative features of your potential purchase.
The tips below outline what some car warranty companies most likely will not tell you. So now you can arm yourself with the right questions to ask before you purchase an extended warranty for your vehicle.
• Unless you specifically ask, many deductibles are collected per repair rather than per visit. So, if you have 3 repairs made during 1 visit, and you have a $100 deductible, that will cost you $300. Be sure to ask for deductible details.
• Another terrible misrepresentation is when the customer is told that the warranty company will pay all parts and labor. You could understandably believe that “all” means all. But, what they don’t tell you is that they have a cap on labor or what is called a “reasonable and customary clause”. So, when your repairs are complete and the bill totals $800, the warranty company might announce that it only considers $450 reasonable or that they have a cap on labor, so you will end up paying that part of the bill out of your pocket.
• When pitching you to buy an extended warranty from the dealership, the salesperson will not likely tell you that the warranty is from a third party that he or she knows little about. And, that dealership may represent 5, 10 or 15 different warranty companies. How does he choose one for you? Simple, the one that offers him the best commission. Is that one of your major concerns?
• "Add-on" miles or "total" miles are often not discussed? "Add-on" miles refer to mileage the contract will offer you in addition to your current mileage. “Total miles” means that the warranty will end when your odometer reaches that mileage. These are very different animals. Both are acceptable, as long as you are clear on what you are actually paying for.
• When does coverage begin and end? Yes, even this can be a point of contention if you’re not careful. Some companies use what is called the “In-Service Date” of your vehicle to determine start and stop dates. What’s that? The “in-service date” is the day the vehicle was purchased brand new – thus in-service. Auto Service Protection Auto Service Protection offers vehicle warranties that BEGIN on the day you buy the warranty and not the in-service date of the car. For example, if you purchase a 4 year/100,000 mile warranty today... it will expire 4 years from today or when your odometer reaches 100,000 miles. BEWARE of plans being offered by other national companies you see on television ... that start your coverage from the day the vehicle was purchased brand new.
• You would be amazed at the number of people who purchase warranties and fail to ask the most basic question of all….”What kind is it?” All warranties are not “bumper to bumper”. There are Powertrain warranties that only cover the engine, transmission and drivetrain.
Since the average vehicle contains thousands of parts that are not covered by the Powertrain warranty, it is not a great value, even though it is often the least expensive and/or your only choice for an older vehicle with high mileage. There are also Breakdown warranties. These only cover mechanical breakage, no wear and tear items.
There are also warranties that list everything that is covered and others that list only what is not covered. Whichever you choose, you will want to ask about a wear and tear clause. That means that the warranty will pay for worn parts that need to be replaced. This is superior since not replacing a known worn part is not only dangerous; but will likely result in a more costly repair down the road. A comprehensive auto warranty that includes wear and tear coverage is generally the best choice if it’s available to you based on the age of your car and mileage. This is also why it is best not to wait too long to look for coverage. As time passes and mileage increases, your choices decrease.
• Can you get "Bumper To Bumper" extended warranty coverage on used vehicle? Simply stated the answer is, "No"! True bumper to bumper coverage is only available from the manufacturer and only on some brand new vehicles. Bumper to bumper coverage may include slight variations; but, for the most part, it means that coverage includes all the cosmetic items (seat fabric, carpeting, body moldings, paint, etc)...as well as maintenance items. Basically, any item on that vehicle will be covered with the car manufacturer's "Bumper To Bumper" coverage. It now seems many Extended Warranty Companies are advertising their coverage as "Bumper To Bumper". That is a clear misrepresentation.
This is by no means a complete list. But, it’s a good start to help you recognize the most common lies committed by omission. Being able to ask the right questions will help you to better understand exactly what you are purchasing and insure that you make an informed decision.
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