What’s the scoop on extended warranties?
I notice lots of ads on TV, spams on my email, cards in the mail, even phone calls wanting to sell the above.
Here’s what you need to know. I personally don’t buy extended warranties on anything. But, I would buy one on a vehicle. Here’s why. A vehicle is very complicated, and it’s not a throwaway item. Consider a higher priced item such as a refrigerator. It sits in the corner, doesn’t get bumped over the road, go from 25 below to 100 above, and only has a couple of moving parts, but an extended warranty might cost as much as 25% of it’s purchase price. On the other hand, a good extended warranty for a vehicle will only cost 5 or 6 percent of the purchase price.
Here’s the most important information of all, if you decide to buy an extended warranty. Buy it from the dealer that you expect to get your service at. I could tell you stories of other extended warranty “companies” that:
- Made us wait five days before an adjustor could come and look at the broken part.
- An adjustor that examined a vehicle, left, and told the warranty company he didn’t think the vehicle had been serviced properly. (not the case at all) but coverage was denied.
- A company that denied coverage after we had taken out the transmission because they’d already paid another dealer to fix it.
- A company that denied a claim because some total limit had been reached.
- Numerous occasions where my staff had to wait on hold for up to an hour to get to talk to the company.
- Numerous times that a company either went out of business or never existed in the first place! There are actually scams that solicit you to pay them and send a worthless piece of paper. The trouble is, by the time you try to file a claim, it could be months or even years later.
- So many loopholes that we can’t get authorization on a repair that appears that should certainly be covered.
- Not being able to get paid at all after we thought we had authorization.
Our policy, as well as most dealers, is that we’ll be happy to repair your vehicle, but you’re on your own to collect from a warranty company other that the ones we represent. Simply put, if you buy our warranty, it’s almost like factory warranty, we handle all the paperwork.
Remember that we’re interested in making sure you’re satisfied with and get a good value on a legitimate product. Our reputation is at stake as well.