Warranty – The Facts.
Wed, 30 Jul 2014
FACTS AND FICTION:
> IF I BUY THE EXTENDED WARRANTY BEFORE THE MANUFACTURER'S WARRANTY EXPIRES, I WILL HAVE DOUBLE COVERAGE ON MY VEHICLE.
Extended warranties are NOT double coverage, they simply extend the term of the warranty the manufacturer provided on the vehicle. Once the manufacturer's warranty expires, an extended warranty takes over to protect you from unexpected, costly repairs. It's important to buy it early, especially before your original factory warranty expires. This is when it will be the least expensive. Similar to purchasing life insurance, the longer you wait, the more it will cost.
> I DON'T NEED AN EXTENDED WARRANTY, I'M COVERED BY THE MANUFACTURER.
There are many reasons to purchase an extended warranty. Your vehicle is one of your biggest investments. An extended warranty will ensure it is always in the best mechanical condition. With the complexity of today's vehicles, one major repair often costs more than the extended warranty.
Hourly labor rates can top $129 per hour in some markets.
Many warranties are transferable and will increase the resale value to potential buyers. Who wouldn't want to own a vehicle that comes protected from repair bills?
> A "MECHANICAL BREAKDOWN" WARRANTY OFFERS THE SAME COVERAGE AS A "WEAR AND TEAR" WARRANTY.
If "wear and tear" is not covered in the contract, then you are probably being offered a "mechanical breakdown" warranty. There are many components in your vehicle such as piston rings and intake and exhaust valves that usually wear out instead of breaking, in which case, they would not be covered under a "mechanical breakdown" warranty. A "mechanical breakdown" warranty is less expensive and less coverage. The only way to tell what kind of warranty you are buying is to read the definitions section of the contract.
> AS LONG AS I HAVE AN EXTENDED WARRANTY, I DON'T NEED TO WORRY ABOUT MY CAR.
Cars still need proper maintenance, as outlined in your car's owner’s manual. Be sure to keep accurate maintenance records and receipts. To neglect this responsibility to your car will not only jeopardize your claims getting paid, but will also put your investment at risk. All extended warranties require that you properly maintain your vehicle and perform the manufacturer's recommended maintenance.
> MY WARRANTY CONTRACT IS AUTOMATICALLY IN EFFECT AS SOON AS I PAY FOR IT.
The selling dealer of the warranty contract bears no responsibility, thus consumers should call the warranty company — within 7 days to activate and confirm that the application has been submitted. Warranty companies usually give their customers an activation number or similar identification, so if you don't receive confirmation of your contract, you may not be covered. There have been instances where consumers have had no idea they were without coverage until some time later, at which point it was impossible to trace their applications.
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