The Lowdown on Extended Auto Warranties

Are Extended Auto Warranties Worth The Price?

It used to be that the main drawback of buying a used car was the fact that the car came without a warranty — after all, there’s much to be said for peace of mind and that’s exactly what an auto warranty offers. However, thanks to extended auto warranties, used car buyers are finding themselves in the position of being able to opt for coverage on their used car purchases. But are these extended auto warranties worth the price or are they just another rip off?

Not All Extended Auto Warranties Are Created Equal

If you’re seriously considering an extended auto warranty, the first thing you need to understand is that not all extended auto warranties are created equal. Just because a warranty company offers you a great price on coverage doesn’t mean that you’re getting a great deal. If the company is charging too little for their policies, chances are they’re going to go under — leaving you with a worthless piece of paper that doesn’t cover any problems with your car.

What about the Dealer?

You may be thinking that the best place to get your extended auto warranty is at the dealer you buy the car from? This couldn’t be further from the truth. If you don’t do your own research and find your own extended warranty provider, you may be paying too much for your policy and you may be dealing with a less-than-reputable supplier.

If your car salesman tells you that you have to choose your policy before you actually buy the car, they’re not being honest with you. You can purchase an extended auto warranty well after you leave the dealer — they just want to make an extra commission.

Many car dealerships also tell their customers they won’t get financing if they don’t opt for the extended auto warranty. Again, this is a dishonest sales tactic used to increase the amount of money they’re making off of you.

Payment Policies

When looking at extended auto warranties, make sure you choose a company that pays the repair facility directly. Auto warranty companies that offer reimbursement are more likely to be fly-by-night organizations — finding reasons to deny your claim after you’ve already paid for it and leaving you to foot the bill.

Check with the BBB

When shopping for extended auto warranties, check out any potential company with the Better Business Bureau. If the company has a number of unresolved complaints, you know you should take your business elsewhere.