What Does Extended Warranty Wear and Tear Coverage Really Mean?

Most used car warranty policies are not maintenance contracts and that is okay. That just means that you are responsible for routine maintenance items like oil changes ¤ brake pads ¤ windshield wipers etc.

Many buyers and just as many warranty salespeople... confuse this coverage with "wear and tear" coverage. There is a clear distinction and understanding the difference can be valuable to you.

"Wear and tear" is the expected reduction in performance of a part due to the cars age ¤ mileage and/or use. This coverage should be clearly defined in any warranty contract and it should read something like this: "It is the company's responsibility to repair or replace any part that no longer meets the manufacturer's specs whether it is broken or not." Look for this simple statement and be assured that you will never face the rejection of a claim on the grounds that the failure can be attributed to "wear and tear".
See Auto Service Warranty coverage « here.

Does Your Extended Warranty Cover Overheating Damage?

While many extended warranty companies shy away from damage caused by overheating, Auto Service Warranty takes a much different approach.

Although damage sustained when a vehicle OVERHEATS can be severe... we take care of all repair costs for covered components provided the vehicle does not overheat due to negligence and provided you act immediately to prevent unnecessary damage when your vehicle overheats.

In fact... if your vehicle overheats and you require a tow or fluid replacement, Auto Service Warranty's FREE Roadside Assistance makes sure you get taken care of... Fast!

No Extended Warranty for Your Car?

People regularly ask me why some extended warranty companies refuse to offer them a contract on their high performance car. For example it's pretty difficult to find any warranty company foolish enough to offer coverage on certain vehicles built by Land Rover (possible quality issues, frequent and expensive repairs), Jaguar (expensive repairs), Mercedes AMG ($20,000 for an engine) and many turbo engine models like Porsche etc.

If a warranty company turns you down they should be honest about why. Be more concerned with the company that is crazy enough to cover these cars. First of all you can bet they won't cover wear and tear failures and the foremost thing on their minds will be trying to somehow get out paying your repairs.

My best advice for you if you have a high end car which no warranty company will touch, is to create your own claims reserve account and don't be stingy. Then you can be your own extended warranty.

Is Your Extended Waranty Transferable?

Another much overlooked but important perk is the transferability of the contract. Also you will always want to be sure that you can transfer your extended warranty contract to a new owner if you decide to sell the vehicle before the warranty expires.

Not only will prospective buyers feel safer purchasing from you, but they will probably be willing to pay more for the peace of mind a warranty offers. Don't forget to ask about this standard perk. You'll save yourself aggravation and maybe even make a few more dollars when you decide to sell.

Four Simple Ways to Avoid Rejected Warranty Claims

1. First and foremost, always get approval from the warranty company before repairs are done! You'd be surprised how many people are denied re-imbursement for a normally covered claim because they failed to get prior authorization.
   
   
2. Most warranties, if not all, require the owner to follow the manufacturer's maintenance guide for your car or you'll be denied a claim. For example, If your engine dies and it's been over a year since you changed the oil, there is a very good chance that your warranty will not cover the repairs.
   
   
3. If your car overheats, please pull over. Damage caused by continued operation after a failure is not covered. Even a rookie inspector can tell when you kept driving with an overheated engine. Towing it to a repair shop is much cheaper than a rejected $2,000 engine repair and your warranty probably includes a roadside assistance program.
   
   
4. If your vehicle has a "salvaged title", by all means let the warranty company know. Otherwise, you may make a costly investment only to find out that a salvaged title voids the extended warranty. Check any used car's VIN# prior to buying to get the accurate status of the vehicle.

How can I compare extended warranty offers?

Below you will find a warranty comparison chart that will help you to compare “apples to apples” so to speak. Complete one for each company that you are evaluating. Simply answer the questions “Yes” or “No” or fill in the information.

• Is this a full-service warranty company? Yes____ No____
• Is the plan comprehensive? Yes____ No____
• Is the warranty transferable? Yes____ No____
• Does the contract include wear & tear? Yes____ No____
• Are parts & labor paid at 100% ? Yes____ No____
• Can you choose the repair facility? Yes____ No____
• Does the deductible apply to each visit? Yes____ No____
• Are claims paid with a corp. credit card? Yes____ No____
• Are inspections free and/or random? Yes____ No____
• Zero Interest and Zero Fee Financing? Yes____ No____
• Name of Company: ______________
• Effective Date: ___________
• Miles: _____
• Are the miles “add-on” or “total”? __________
• Months: _____
• Deductible: ______
• Price with Deductible: _______
• Price with Zero Deductible: _______

You'll know you have found a good company and a great deal when the first 10 questions are answered "Yes". Then, choose the best fit for you regarding months, mileage and deductible at the lowest price.

Who should not buy an extended warranty?

Extended warranties are a waste of money for lazy owners. Timely vehicle maintenance is a demand of any reputable auto warranty company. So, if little Joe Jr. is heading off to college and you have the slightest suspicion that he might skip an oil change or spend the bucks you send for brake pads on beer, do not waste your money on an extended warranty. It is also important to keep records, so when a claim is filed the maintenance of the vehicle is never an issue.

How are claims paid?

Some warranty companies ask you to pay and wait for reimbursement. Others pay promptly with a corporate credit card. No brainer... right?

Search until you find an extended warranty company that pays all parts and all labor... allows you to go to the repair facility of your choice and pays with a company credit card.

What do I need to know about my warranty?

What about parts... labor and qualified repair facilities?

Many companies will only pay what is known as "reasonable" or "standard" rates for parts and labor. That means that if your mechanic charges $85 per hour and the contract's "reasonable" is listed at $55 per hour, you pay the difference.

Beware of companies that include a cap on parts or labor since those extra dollars will be coming right out of your pocket. Also, choose an extended warranty company that allows you to go to the repair facility of your choice, including the dealership if that’s what you prefer.

Extended warranty comparisons and decisions?

What extended warranty comparisons and decisions should I be prepared to make? First, find out what kind of contract each company is willing to offer you. Generally, you will be comparing time, mileage, deductibles and price. Nevertheless, you need to compare other factors too.

For example, are you being offered "add-on" miles or "total" miles? Often, you will find the high mileage contracts are based on total miles. "Add-on" miles refer to mileage the contract will offer you in addition to your current mileage. Both are acceptable, as long as you are clear on what you are actually paying for.

Let's say that you do not plan to keep the vehicle very long. In that case, ask for a quote with fewer miles and/or less time and be sure to ask if the warranty is transferable since a warranty can be a good selling feature if you decide to sell the vehicle on your own.

What are the risks of waiting to purchase my extended warranty?

As the vehicle accrues mileage, the cost of an extended warranty increases.Labor rates are constantly rising. Many parts of the country have seen labor rates increase as much as 20% just in the past few years. Naturally, warranty coverage costs rise as well. As your vehicle ages, more repair data becomes available and many vehicles, especially high-line models, are placed into higher rate classes. However, once you buy coverage, your rate class is guaranteed not to change.

Here’s a final rule of thumb for you to consider. Any reputable warranty company who plans to stay in the business wants your warranty to end when your vehicle has reached 10 years of age and/or 100,000 miles. Not following this basic rule will lead them to bankruptcy. So beware of any company that promises more than common sense can deliver.