Auto warranties come is as many flavors as ice cream, so it pays to be an educated shopper. Unfortunately, if you rely on warranty salesman to have your best interest in mind, you're going to be in big trouble. It's my experience that most salesman are paid commissions on sales and this puts them in a position of having their best interest in mind, not yours.
All auto warranty contracts are divided into several sections and while the format may vary, they all contain the same information. If all the information isn't in the document, it's not likely a contract, but a sales brochure. Be certain that you're given the actual warranty contract and not an abbreviated version.
Most auto warranty contacts will have at least the following sections: Definitions, Terms and Conditions, Coverage, Filing a Claim, Service Department Guidelines, Cancellation Procedure, and Exclusions.
Each section is important and you need to be able to determine if a section is favorable or not. Once you have evaluated each section, you're ready to make a decision. Avoiding scams and getting the best auto warranty is doable if you are an educated shopper. With an understanding of auto warranty contracts, there's no reason to depend solely on what you're told by a salesman.
One of several sections of the auto warranty contract is the Definitions Section, which I'll discuss here.
In this section you'll find the term "failure" and/or "mechanical breakdown". Warranties providing less coverage only pay for mechanical breakdown . These extended auto warranties define mechanical breakdown as a defect in parts and workmanship of the manufacture's supplied part, or a defect that makes the part unable to perform the function for which it was designed. It's reasonable to believe that if a part was poorly manufactured, it will break within the first few years when the vehicle is still under the factory warranty. The broadest auto warranty coverage will also pay for a failure of a part. Failure coverage includes repairs needed because of wear-and-tear. Usually defined as: "a failure will be deemed to have occurred when a covered part has worn beyond the manufacturer's tolerances". Mechanical breakdown extended warranties will not cover repairs needed because a part's performance has gradually deteriorated because of normal wear and tear, unless a mechanical breakdown has occurred first.
Companies that don't offer you an extended auto warranty that includes coverage for a failure are certainly not a major player and others only provide failure coverage to 50,000 miles on the odometer.
Considering as much as 25% of all repairs needed are because of wear-and-tear failures, this auto warranty coverage is important. Extended auto warranties without wear-and-tear coverage are often priced the same as those that include it, so be careful and know what you're getting.
Last year there were 37 new companies selling auto warranties and by the end of the year 28 were no longer in business. How do you protect yourself? First, make sure you are buying from a direct seller rather than a broker or car dealership. Buying direct from a warranty company is the best route. There's absolutely no reason to have a middleman involved as they bring no added value to the table and you incur more risk and expense. Second, make sure they've been in business at least 10 years. If you do these two things, you'll be in good shape.
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For twenty-five years, Tom Andrews sold auto warranties and insurance policies direct to consumers. He knows the difficulties faced by consumers when buying auto warranties and the scams that are waiting for them. Retired, he now writes to inform consumers on how to get their monies' worth and avoid scams. For more information on how to buy auto warranties, go to:
http://www.auto-warranty-spy.com
