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How Well Do You Know the Warranty on Your Car?


fter comparing, researching, test driving, and endless discussions with your family and friends, youíve just bought the car of your dreams. Driving it out of the lot, your head is in the clouds, but your mind is at peace. Youíre sure youíve asked all the right questions and are now driving the perfect car.

But there may be some very important questions you have overlooked. What do you know about your new carís warranty (besides the fact that it is with the other papers in the glove compartment)? Ideally, you should know about the coverage before you buy your car, but, as they say, better late than never.

So pull over RIGHT NOW and dig out your warranty. First of all, find out if you have a standard or an extended warranty.

A standard warranty usually covers 36 months or 36,000 miles. In general, these warranties will cover any part that breaks down under normal conditions, but tires and batteries are usually excluded. Parts and labor are covered, but only as long as the problem did not result from misuse, an accident, or lack of maintenance.

If you were savvy enough to ask about the warranty BEFORE you bought the car, your salesperson will inevitably ask you if you want to buy an extended warranty. In order to answer that question, you will need to ask a few questions.

aHOW LONG DOES IT LAST? What is the time limit, and how long does it cover your car beyond the standard warranty?

aWHAT IS THE MILEAGE LIMIT? Many extended warranties end at 100,000 miles.

aWHEN DOES IT GO INTO EFFECT? Many people do not realize that most extended warranties go into effect the same time as the factory warranty. So, you should try to negotiate with your dealer to make an exception by offering an extended warranty that goes into effect after you have owned the car for 12 months or 12,000 miles.

aWHAT DOES IT COVER? Find out what repairs are covered and what repairs are excluded. Does the warranty cover wear and tear in addition to mechanical failure? There are parts that need to be replaced because of wear, and parts that need to be replaced because they break. Does your warranty cover both these situations?

aWHAT IS THE DEDUCTIBLE? Find out what you must pay out before your warranty kicks in. Deductibles range from $50 to $200 or more. Is the deductible charged per repair or per visit? This is a huge difference. Say you have a $100 deductible per repair and your car needs 3 repairs in a single visit. That will cost you $300. However, if your deductible is per visit, you only have to shell out $100 bucks no matter how many repairs are necessary.

aWHO DOES THE REPAIRS? A manufacturer-backed warranty is honored at dealerships around the country. But a dealer-backed warranty may be limited to a single dealership. If you have what is called an aftermarket warranty, you may be able to pick your mechanic, but will it be difficult to get approval for your repairs?

aWHO PAYS THE BILL? Will you have to pay the bill upfront and wait to be reimbursed? If it is the company who pays the bill, what is involved with authorization? And how long will you have to wait to find out if a repair is covered by your contract?

aWHAT ARE THE MAINTENANCE REQUIREMENTS? What kinds of routine maintenance are you required to pay for yourself? If you have a manufacturer-backed extended warranty, all maintenance work must be performed at the dealership.

aCAN YOU CANCEL? Some extended warranties require a cancellation fee, and some cannot be cancelled at all. Other contracts can be cancelled during an introductory period.

aHOW SOUND IS THE COMPANY BACKING THE CONTRACT? Check out the rating of the company with Standard & Poorís. You can also check with the Better Business Bureau to find out if any complaints have been filed against this company.

If you plan to keep your car for a long time, itís a good idea to look into an extended warranty, especially if the car is equipped with high-priced electronic features. Prices can be exorbitant for repairing this type of equipment.

Just make sure to ask all the right questions. 

  Also See:

Financial Automotive Articles

Avoiding Car Sales Scams: The New Car Buying Process -learn about negotiating and other important tips.

No Lemons Wanted- Used Car Buying Tips  -find a great used auto without suffering through a lemon.

Everyone's Offering 0%.  Is it Time to Buy? -you hear the ads all the time on tv and the radio.  Too good to be true?

New Car Buying Worksheet Use this worksheet to help yourself sort though all the data.

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