Auto Warranty Basics

An extended auto warranty is basically an insurance plan that will pay for any mechanical repair that might be needed as long as it regards covered parts. They’re also called extended service plans and in fact they’re not real warranties as intended by federal law.

As with any other kind of insurance you pay an annual premium and you get a certain amount of coverage: in this case it’s usually measured as number of claims, but more and more companies offer unlimited claims.

Before purchasing a warranty inquire about these aspects

Does the vehicle come with a warranty? When does it expire?

New vehicles come with the manufacturer’s original warranty, which usually includes coverage for three years or 36,000 miles, whichever comes first. Used cars may come with some type of coverage provided by the dealer, or still carry the manufacturer’s warranty. Always ask the dealer if there is any coverage on the car.

How much does the warranty cost?

This is the easiest question: as soon as you request quotes you’ll get an idea of how much you’re going to pay for the warranty coverage. Prices usually range from few hundred dollars to $2500 or more for luxury cars. Obviously the price depends on the car make, the model, length of contract and the condition of the vehicle.

Choosing to pay a deductible for every repair could save you a lot on the premium.

What’s covered by the warranty?

Not everything is covered by warranty. Usually things like brakes, shocks and material subject to wear and tear isn’t covered.

Before purchasing a warranty ask for the contract: that’s where you should look for what’s covered and what not. Requesting quotes for auto warranty is easy and you can easily do it from home without any worries, but remember to read the contracts of the warranties you get quotes for, there might be substantial differences between contracts.