It’s nice to be able to get a fixed monthly cost to own and drive your car. When you purchase that new vehicle and go into the finance office to determine how your going to afford that monthly payment, they always try and add in that extended warranty option.

Now if the warranty covered everything needed when the car broke, then it would be a no brainer, buy it. But guess what, they typically don’t. Here are some examples:

1. Warranty companies may not be willing to pay the posted labor rate, sometimes by as much as half. There explanation is we will pay fair and reasonable costs, but they get to determine what’s fair and reasonable. The customer is responsible for the difference, plus any applicable deductible.
   
2. Some companies will want to install used parts, let me say that again, they may want to install USED PARTS. If you read some contract’s, it’s in there I’ve looked.
   
3. Some require an inspection of needed repair after diagnosis by an independent adjuster (The independent adjuster topic is for another article). They have up to 48 hours to send somebody out to inspect the vehicle, and sometimes take up to another 24 hours to agree on repairs. That's three days just to get permission to fix the vehicle. If your policy coverage has rental, the rental only covers time to actually fix the vehicle, the three days are on you, the policy holder.
   
4. The contract may only pay for listed parts covered. Lets say the brake caliper sticks and is a covered component, but when the caliper stuck on it damaged the brake pads and brake rotor, these are considered wear items and may not be covered even though the cause of premature failure was the caliper sticking. Not fair, even dealerships would cover this under there normal new car warranty.

Now the good. I have found some really good companies to deal with. When we call in the repair, I get a representative who allows me to do my job in every sense of the word, so long as you can back up everything needed, life is good.

A suggestion I would give you is if they would allow you to purchase the policy AFTER you buy the vehicle, or at least have someone else look over the actual policy to try and determine if it’s a good one. Google the name of the company to start.

Or self insure. Put away $50.00 a month into an account If you buy the vehicle new or $100.00 if it is a used vehicle. This allows you more flexibility.

I hope this helps, Good luck