A Must Read Letter If Considering a Car Warranty
Dear Reader:
I recently purchased a new car warranty online
for my new Ford Escape. I investigated all the companies that I could,
and spent a lot of time on the phone talking to a dozen of them, as
well as filling out forms. Here's my Q and A of what I've learned. I
hope it helps you.
How will I know the warranty company is legitimate?
Look for a company that is listed with Web Assured or Better Business
Bureau. That's a good start.
But in some cases, even that may not be sufficient. Never choose
a company based on their web site presence or banner advertising. Remember,
it costs only $10 a month to keep up a major web site, and about 10
cents to $5 to get you to click on it.
One more thing: When you speak to someone at an auto warranty company,
listen to how they treat you and their competition. Do they push you?
Do they trash the competition? Remember that these are salespeople who
may or may not know the real ins and outs of their own warranty. It's
your responsibility to look at the coverage. A few minutes there can
save you hundreds now and many thousands in repairs later.
What questions should I ask the warranty company?
| To start, ask these four:
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Does the warranty cover problems resulting from overheating? Please
show me that in the contract. |
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Is "wear and tear" covered? Please show me that in the
contract. (This is important because a car part may wear out but
not break-Example, an electric moonroof motor may grind and not function
well, but it still isn't "broken". |
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Is there "breakdown" coverage? Please show me that in
the contract. |
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What doesn't the contract cover? Please
show me that list in the contract. (Oh, this is important. You want
specifics here. If they can't show you the exclusions, then walk.) |
Note: Bumper to Bumper doesn't ever mean
what it says. Extended warranties don't cover glass, light bulbs, trim,
upholstery, paint, air bags, batteries, shock absorbers, and more. Don't
worry about it. These are standard exclusions, and they are legitimate.
What questions should I ask myself?
The main question here is, "Do I really need
an extended warranty?" If you are going to keep the car for only
1 or 2 years before selling it, then the factory warranty will still
be in force, and the new buyer will likely be satisfied. If you are
going to sell it after 3, or 4 years, then consider whether you yourself
would want to buy a pre-owned car without an extended warranty. Act
accordingly. My view is that it's much, much easier to sell a 3 to 8
year-old car with a warranty. Easier to sell, and in less time. Consider
the hassle of it. Act accordingly.
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