Dealer issued Extended Auto Warranty

If you’re buying a used car chances are you’re evaluating the purchase of an extended car warranty, and this is actually a wise choice because it will save you from not-so-pleasant surprises down the road.
Any dealer who can call himself a professional seller will suggest an extended vehicle warranty coverage.
To make things clear, the dealer is simply reselling a warranty plan issued by one of the major auto warranty companies and adding a not so small markup.
It’s important to understand that you can get the same coverage directly from the auto warranty company at a lower price.

But there’s something more to add, because simply overpaying might be acceptable for someone; you could end up buying a warranty plan that is not issued by a third party at all, and you don’t want this to happen. Some dealers might decide to issue their own warranty plans on used vehicles, and these kinds of insurance contracts have several downsides: you usually can get service done only at the dealership leaving you uncovered when you’re on a trip, or they might cover only some very specific breakdown situations.

And the list of negative aspects is not over at all:

• if you are on a long trip and you’re left stranded because something in your car just decided to break, you’ll probably have to pay for the repair yourself because you won’t be able to get the car back to the dealership, moreover you’ll have to pay for any other expenses like any necessary hotel nights or for the travel back home, all expenses that would have been covered by any policy issued by the major auto warranty companies.

• if you decide to move far from where you live you’ll have to buy another auto warranty plan because bringing your car to the dealership wouldn’t make sense: with a third party warranty you usually get nationwide coverage through networks of thousands of repair shops.

• have you considered that a dealership can go bakrupt? There will be other businesses, banks, manufacturers and others trying to get money out of the dealership, and they’ll probably get what’s left before you can raise your hand.

The real strength of dealerships selling auto warranties is that their customers don’t realize there are other options, and that these options would often get them a better service, and always at a lower price.
You researched the topic, hopefully before buying it from a dealership, and you found out that buying it directly from a warranty company is the way to go.

You might wonder why some consumers buy extended warranties from car dealerships:

• In most cases the buyer has no intention of buying it, they’re just buying a used car and the dealer suggests this revolutionary policy. Understanding that it’s a valuable service the buyer agrees to purchase it, but he doesn’t realize there are other options that would allow him to save money and, probably, get a better service.

• When you’re buying a car you usually deal with big numbers, so an overpriced warranty plan can easily be slipped into the total. If you’re going to pay for an extended warranty, which usually is a wise choice, just make sure you get a good coverage!

• Often the salesman tries to let you think their own warranty is the manufacturer’s warranty, so that you think you can get service at any of the repair shops authorized by your car’s manufacturer. This kind of warranties are those on new vehicles and not on used ones.

In conclusion when a used car dealer tries to sell you an extended warranty you should ask few questions:

• will I get free repairs nationwide?

• which insurance company issues the warranty?

Now, in case both the answers are satisfying, you know you would be still paying hundreds more than if you went directly to the warranty company so you should still not get it from the dealership, but rather buy it directly.

If you don’t get it from the dealership you won’t have any pressure and you’ll have plenty of time to compare quotes, plans and contracts.

Start your search for auto warranty coverage now and don’t fall for the dealer’s sales pitches!