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[an error occurred while processing this directive] Extended Warranties

Extended Warranties 101

Each segment (price negotiation, financing, insurance, extended warranties, and even servicing) has the potential to save you a tremendous amount of money. We provide you with some considerable money saving tips for extended warranties in this article.

Extended warranties are an extension of the bumper to bumper warranties traditionally offered on new vehicles. Most vehicles are sold with a 3 year/36,000 mile bumper to bumper warranty. And isn’t it Murphy’s Law that something will go wrong the week after your bumper to bumper warranty expires?


There are several misconceptions about auto extended warranties. We’ve listed a few here to clear up the confusion.


Myth 1: All extended warranties are made the same.

The Truth: Numerous extended warranties are available to consumers. Extended warranties are offered in a variety of coverages and have different prices. Coverage also varies based on the vehicle being covered.

The Truth: Just like auto loans, you are not required to purchase your extended warranty from a dealership. There are several companies that offer extended warranties. Some companies even offer used car extended warranties. We have found that WarrantyDirect tops the list of these companies. They have a long 27 year track record of selling extended warranties through wholesale channels such as manufacturers, car dealers, banks and credit unions.


Myth 3: I can only buy an extended warranty when I purchase my new car.

The Truth: Many extended warranty programs are offered after you have purchased the vehicle. WarrantyDirect offers programs for vehicles even after the purchase date. Keep in mind, the newer your vehicle, the lower the rates for extended coverage will be.


Myth 4: If I wait to purchase an extended warranty, I will get longer coverage.

The Truth: While some consumers believe that an extended warranty can only be purchased at the time of sale, many other consumers believe that waiting will increase the coverage period. Much like life insurance costs rise as we age, the cost for a auto extended warranty will rise as the vehicle ages and accrue mileage. You will be offered the longest terms and the lowest rates on extended warranties for newer vehicles with lower mileage. The newer your vehicle, the lower the rates for extended coverage.


Myth 5: I have to pay “sticker price” for the dealer extended warranty.

The Truth: As we recommend with price negotiations, auto financing, and auto insurance, you should also get more than one quote for an extended warranty before making a decision. Dealers have been known to negotiate the price of extended warranties. They have a cushion (sometimes as high as 50%) built into the price of their extended warranties. Bottom Line – price compare. WarrantyDirect has a history of selling extended warranties through wholesale channels such as manufacturers, car dealers, banks and credit unions. Simply put, you can save money by cutting out the middleman (AKA – auto dealership).


Additional Tips:

Compare apples to apples. When you compare your WarrantyDirect quote to your dealer quote, make sure each warranty has the same coverage. Price is important, but understand what you are getting in exchange for that price.


Buy the Coverage That You Will Need. If you have ever had a serious auto accident while insured on a cheap insurance policy, you know how ugly this can be. Just like auto insurance, not selecting the appropriate coverage can be costly. As mentioned earlier, extended warranties come in several shapes and sizes. Make sure you select one that fits your lifestyle and future auto ownership plans.


Review the details of the warranty before you buy it. The "fine print" will explain what is covered, what isn't covered, where repairs can be made, deductibles, and more. Know what you are getting into before you sign on the dotted line.


Extended warranties are not a dealer requirement. Car salespeople have been known to tell buyers this in order to get customers to buy an extended warranty. Remember this: Buying an extended warranty is never required with the purchase of a vehicle, never required for financing, and never part of the purchase price. Extended warranties are "add-ons" and any dealer or salesperson that tells you that it is "included in the sales price" or "required for financing" is trying to pull a fast one on you.

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