Automobile Warranties
You depend on your car for nearly everything you do—driving to work, picking up the kids at school, and running everyday errands. With your vehicle playing such an important role in your life, you need to make sure you can keep it running, and this means purchasing an automobile warranty that offers as much coverage as you can afford.
Types of Automobile Warranties
All new cars come with a manufacturer's warranty. A new car warranty covers most repairs and is in effect for three to four years, or 36,000 to 48,000 miles (whichever comes first). You can also purchase an extended warranty, for both new and used vehicles, which covers the vehicle after the original manufacturer's warranty expires.
What to Look for in an Extended Warranty
First of all, look at more than price when comparing automobile warranties. One may be significantly cheaper than the others, but it may also offer less protection or stay in effect for a shorter period of time. Compare both prices and features, and ultimately choose an extended warranty that best balances the two. Consider the deductible: If it's too high, you may not be able to afford repairs. When purchasing an extended warranty, make sure it covers both "mechanical breakdown" and "wear and tear" because many vehicle problems are caused by the simple wearing out of parts. Finally, find a warranty with a money-back guarantee, so that if you decide it is not what you need, you can cancel it and receive a full refund, provided you haven't made any claims within the first 30 or 60 days, depending on the company.
Understanding Your Warranty
Before you sign that contract, know exactly what you're getting from your automobile warranty. Ask to see a complete sample contract—one that outlines precisely what is and is not covered. Keep in mind that several parts are never covered in an extended warranty, including upholstery, tires, air bags, and paint. These are standard exclusions; not a sign that you're being scammed.
