is an Extended Warranty* (vehicle service agreement)?
Only manufacturers offer a
"bumper-to-bumper" factory warranty, limited by time
and/or miles. In most cases, the factory warranty will cover
the repair or
replacement of most vehicle components should they fail
under normal operating
conditions. In addition, some manufacturers offer a "power
train" warranty that
will, for a longer period, cover the failure of a limited
number of parts that
are lubricated by engine oil. Most Warranty carriers markets
agreements (commonly called "extended warranties") that
provide exclusionary (
new car) coverage back 5 model years, and emulate the
offered by the original selling Dealer, at the time of your
Comprehensive listed component coverage is also available
for pre-owned autos
and trucks back 20 years.
Why do I need an Extended Service Agreement?
Approximately 33% of all
vehicles experience a breakdown in a given year. Should
this happen to you after the factory warranties expire, you
have nothing to
protect you from repair costs that can be in the thousands
of dollars. More
importantly, owners will frequently put off needed repairs
until they can afford
the cost of the repair. This delay often results in
additional damage to the
vehicle, and in some cases an increased repair bill, and
often leading to an
unsafe driving condition. The risk of component failure and
costs increases with your vehicle's age and mileage. Many
offers a variety of quality programs, comprehensive extended
protect your budget against unexpected repair charges. Think
of an extended
warranty as a risk-management tool that ensures that repairs
to your vehicle are
performed when they are needed. All our warranties are
transferable so your
vehicle will be worth more when you sell it. Please contact
one of our
Professional Brokers to discuss the coverage that best fits
Why are your Service Agreements, (extended warranties) so
Car dealerships use
high-pressure sales techniques to sell extended warranties
in order to improve the profit margin of the vehicles they
sell, and then
include it in your financing thus increasing the margin yet
again. Because we
have no such overhead pressure on our programs, we are able
to offer an equally
competitive, and sometimes identical warranty product at
reduced prices. By
acting as an Independent Broker/ Agent we shop out the most
coverage for the dollar, usually reviewing as many as 10
them down to 2, discussing with you the features, benefits
and price, before
making our recommendation on your behalf.. As your agent we
will shop the"
better" internet providers, as well as long established
carriers working within
1,000's of U.S. Dealerships. It gives us the ability to
bring you our
Professional Services and 1st rate warranty products in
volume, with an
affordable sales strategy.
What is “Wear and Tear" or "Failure Coverage"?
contracts specifically exclude breakdowns that are caused by
"wear and tear". This means that if a part fails because it
wears beyond O.E.M.
factory tolerance, the warranty provider will not pay for
the repair because
the part did not "break", it just "wore out". Many
warranties are strictly
mechanical breakdown polices. As an example (Should a ball
joint break and you
are towed in, it would pay for towing (usually $50) and the
parts and labor on
the repair. If the other ball joint is diagnosed as out of
tolerance but has not
actually broken yet, if replaced it would not be covered
under the existing
contract.) With Wear & Tear or as some carriers designate it
the out of tolerance item would be replaced at the same time
at no charge other
than the deductible.
Are your Service Agreements insured?
Yes, all our service
programs are either directly insured or
re-insured by some of the worlds largest RE's. The carriers
reserve funds are used to pay for claims against your
agreement, these monies are secured for your protection.
Insuring the reserve trust fund with an A.M. Best A or A+
rated insurance company is the best way to ensure customer
confidence. Insurance companies must comply with strict
Federal guidelines that continually monitor solvency. As a
result, even if the administrator should use all of the
reserve funds to pay for submitted claims, the insurance
company steps in to make sure that your covered claims are
paid. Look for this in any carrier.
Who is the "administrator"?
When your car requires
repair, the ASE service facility you
choose will contact the claims administrator via the 1-800
number included in your extended warranty packet. The
administrator is responsible for determining if the reported
problem is covered by the specific contract purchased. They
also are responsible for authorizing credit card payment to
the repair shop for covered claims, scheduling inspections,
and handling contract transfers to new owners and
cancellations should the vehicle be traded or stolen..
What happens if I sell my vehicle?
Your car or truck will be
worth hundreds, if not thousands
more in perceived value when prospective buyers know that it
protected with an extended service agreement. All programs
purchased through The carriers are transferable to the new
owner when you sell your vehicle. If you trade your vehicle
a dealer, you must cancel your warranty within 30 days, and
receive a pro-rata refund of the unused portion. Refunds are
determined by the greater of the days in force, or the miles
driven, based on the term of the plan selected and the date
coverage began. You will receive your refund in 30-45 days.
How can I pay for my new Service Agreement?
Most Warranty plans have
several payment options: cashiers
checks, money orders, personal checks, MasterCard, Visa,
Discover and American Express. We also provide programs
through our carriers for financing with no approval
no interest, and only a small administration fee for
electronic transfer of funds.
When does my agreement become effective, and then expire?
Most Service Agreements go
into effect when vehicles pass
inspection (if required by age and mileage) and deposits.
Immediate coverage for those unexpected breakdowns. Unlike
many Internet Warranty companies whose polices go into
30 to 45 days and 1,000 miles after the contract is signed
EXPIRATION: The programs expire when the vehicles have
either their mileage parameter, or their time parameter
expressed on the original agreement. We have chosen not to
represent 100% refund polices for none use, which in reality
are only paid out to 2% of warranty purchasers. A service
for a tire or battery negates the refund on policies which
usually have a surcharge built in, without your being aware.
Beware of carriers offering buyback coverage.
Should I buy an extended warranty?
Only you will be able to answer this question. Before
you buy get the facts. Use this site to to help make an
informed decision! Approximately 33% of all vehicles
experience a breakdown in a given year. Should
this happen to you after the factory warranties expire,
you have nothing to
protect you from repair costs that can be in the
thousands of dollars. More
importantly, owners will frequently put off needed
repairs until they can afford
the cost of the repair. This delay often results in
additional damage to the
vehicle, and in some cases an increased repair bill, and
often leading to an
unsafe driving condition. The risk of component failure
and associated repair
costs increases with your vehicle's age and mileage.
Many Warranty companies
offers a variety of quality programs, comprehensive
extended warranties that
protect your budget against unexpected repair charges.
Think of an extended
warranty as a risk-management tool that ensures that
repairs to your vehicle are
performed when they are needed. All our warranties are
transferable so your
vehicle will be worth more when you sell it. Please
contact one of our
Professional Brokers to discuss the coverage that best
fits your needs.
Why buy an extended warranty?
I do not need to tell you that vehicles break or wear
out. Where most manufacture warranties expire in 3 or
4-years, an extended warranty can provide some repair
relief afterwards. Consider this, your vehicle is one of
your largest expenses. Here is something to put the cost
of your vehicle in perspective and this only one
circumstance. An middle range house costs around
$150,000. This equates into a monthly mortgage of around
$1100 per month. We put this into a monthly cost for
comparison. If you consider most households have at
least 1 continuous monthly auto payment. A vehicle
payment can easily be 30% of your mortgage. If you
purchase any type of high end vehicle it can be 50% of
your mortgage. Many circumstances would make this the
second highest expense.
Will you have to take your Vehicle to a mechanic?
Vehicles today are complicated and if you do not have
the correct equipment, impossible to diagnose, therefore
making it harder to repair.
Types of Policies
a.. BUMPER TO BUMPER
Only the Manufacturer can offer "Bumper to
Bumper" coverage!!! "Bumper to Bumper" (from the
manufacturer) covers EVERY electrical and mechanical
part on your vehicle, including cosmetics, vinyl,
leather, upholstery, rust, paint, paint oxidation,
corrosion, emissions, and the exhaust system. Any
internet website or salesperson stating that their
agreements are "Bumper to Bumper" are misrepresenting
b.. EXCLUSIONARY AGREEMENTS
This is the most comprehensive Service Agreement
that you can purchase for your vehicle. Since there are
so many parts on a car, they can only list what is
excluded. All parts on the vehicle not listed in the
exclusions, are covered. Hence the phrase
"Exclusionary." Best Used Car Warranty offers Exclusionary
Coverage for most vehicles 20 years old or newer with
less than 60,000 Miles on the Odometer.
c.. LISTED COMPONENT AGREEMENTS
Most of the Auto Warranties for New & Used
Vehicles found at many Dealerships, Credit Unions or on
Internet Websites are called "Listed Component"
agreements. They only "List What is Covered". All of the
other parts on the vehicle Not Listed in the Agreement
are Excluded, hence the lower cost.
d.. START DATE OF COVERAGE
Our Agreements Start on the Purchase Date of the
Contract, not the Original Purchase Date of the Vehicle
(like at the Dealerships).
e.. DO NOT BE FOOLED BY LOWER PRICING AND INFERIOR
You need to COMPARE contracts when shopping for a
Service Agreement. For a proper comparison you should
get actual copies of the contracts (not brochures, as
they are vague). If the verbiage on the contract states,
"We provide coverage for the following components", it
is a "Listed Component" agreement, and not an
f..Power Train Coverage
All internally lubricated parts of the Engine,
Transmission, Drive Axle Assembly (front or rear), and
Transaxle Assembly are covered. Seals and Gaskets and
the 4x4 Transfer Case can be covered at an additional
Once the Factory Warranty has elapsed, our Extended
Service Program will cover the complete vehicle and
Conversion Unit out to its selected time frame or
mileage, as outlined in the agreement. Underwritten by
one of our primary carriers, our service program will
cover the Alt Fuel Conversion Units "ONLY" while the
vehicle is still under the original Factory Warranty
Period (the first 3 years or 36,000 miles of your
Who should I buy the extended warranty from?
Dealers-You can buy an extended warranty from
your dealer or an independent broker.
Buying the warranty from a dealer is easy. They make it
more convenient for you to purchase an extended
warranty, they just add it to your loan.
Your dealer may very well be reselling the warranty
similar to a broker. This is the reason you can buy a
vehicle from any of the major manufactures with an
extended warranty with a top name from the manufacture.
(I did not name the manufactures for commercial
reasons.) If the dealer is reselling the warranty you
can be assured they have included a mark up, sometimes
doubling the cost. The dealer also sales only the one
plan. They may not give you several options to chose
Broker-Unlike the dealer you may not be able to
add it to your loan. Check out your broker some of them
are fly by night. These are the bad things. The good
things I have added in the bulleted list.
A broker can offer you more or modify a plan that
works for you.
You do not have to cough up your money 3 years in
advance! If you are like me you keep your money as
long as you can.
You may be able to work out a low payment plan with
Get more for your money. Where it may
not seem like it is less money, you get more
can get a brokers to argue in your behalf.
►If you can do with out the
the part about adding the cost of the warranty to the
loan, brokers have more benefits. You can get more from
a broker, but make sure you do your background
homework. Use the resource links from the home page.
Where can you take your vehicle for service?
Any ASE, ASA, or
IATN (international automotive
certified repair facility in the continental united states,
and Canada. They repair facility is paid how they want to be
paid direct by corporate credit card or check. Some
excellent programs are still on a reimbursement program, and
that is fine with a reputable established company.
Warranty Buyers Do's:
Here are some important tips to remember in your search
for an extended warranty for your vehicle. There may be many
more issues you will have questions about, but these points
should always be addressed before purchasing.
Do: Read your contract before you buy.
Many consumers find warranty contracts confusing.
Exclusionary, listed component, powertrain, bumper to bumper
and comprehensive, each of these terms should be plainly
defined in your contract. Be sure of what you are
purchasing, some coverage's can be misrepresented by
unethical sales people. So READ READ READ your contract.
Do: Ask if the warranty
company is direct insured or re-insured.
There are two types of companies in the warranty industry,
direct insured and insured by a Risk Retention Group. Direct
insured companies have state and federal government
guidelines that they must follow in order to do business and
are required to keep more reserves in trust to administer
claims. Risk Retention Groups face less government
restriction and are not required to meet the same standards,
so you should verify their business history, the amount of
time they have been in operation, where the company is based
and their financial stability. A financially weak Risk
Retention Group can be the death of an extended service
agreement, some of the best known warranty companies are
insured by Risk Retention Groups. These types of extended
warranties are not necessarily bad options, but you should
know all the facts about them before you buy. If this is a
major concern for you, then you should ask for quotes from
direct insured companies only.
Do: Ask for information
about the warranty company.
There is no fault in asking questions about the warranty
company you have been quoted. Ask how long they have been in
business, how they pay their claims, and if they are based
in the United States. Also ask who the administrator of the
contract is, how they are insured and any other background
information that will help you to make your decision. Be
sure to follow up on the information you receive, someone
running their mouth isn't coverage. Empty sales promises
won't put wasted money back in your pocket.
Do: Ask if the contract
being offered covers full parts and labor.
Some service contracts may cover only a portion of the
cost of parts replacement and labor, while other warranty
plans may replace failed components with used parts. Be sure
to verify that 100 percent of parts and labor cost are
covered for the necessary repair. Additionally, make sure
that the contract replaces parts that fail with either new
or rebuilt components meeting manufacturers OEM
Do: Check the BBB Report.
Check the status of the company with the Better Business
Bureau BBB.Org. BBB reports provide information on over two
million organizations. Many companies participate in the
BBB's Online Reliability Program, however, this program does
not give the current status of complaints. Be sure to visit
the BBB.org main website and lookup the company name to see
a complete report. It is a good idea to check before you
invest. Not all companies are members of the BBB, if they
aren't be sure to ask for the details.
Do: Check the AM Best
Check the status of the company with AM Best. AM Best
monitors the financial stability of companies and assigns a
corresponding rating. Companies may be listed with AM Best
but not rated, so you have to login to view a company's
current status. Membership is free but, you will have to
give your email address and a password to join. Some of the
best advice I can give to consumers shopping for an extended
warranty, is to buy a service contract when the company or
administrator listed on the contract is A Rated by AM Best.
Remember the contract agreement is between you and the
people listed on the contract, ANYONE ELSE'S RATINGS DON'T
Do: Know the correct
information about your vehicle.
When requesting quotes from Brokers, Agents or Internet
sites it is very important to provide as much information as
possible about your vehicle. Such items as Turbo Chargers,
Superchargers, 4,6,8 10 or 12 cylinders, 4X4, All Wheel
Drive, 4 Wheel steering and Diesel powertrains make a large
impact on the cost of an Extended Warranty.
Also make sure you know how much coverage you need.
Determine how many miles a year you are driving and how long
you plan to keep your present vehicle. Purchasing a seven
year warranty is unwise if you are panning to keep your
vehicle for three years. By providing this information you
can eliminate confusion when purchasing warranty coverage.
Do: Expect to pay a fair
There is an old saying in the repair business, "Good
work ain't cheap and cheap work ain't good". This rule
applies to your extended warranty coverage as well. Cost is
a major factor in your decision to purchase a an extended
warranty. However, it should not be your only concern.
Remember to consider all the information concerning the
warranty contract and weigh the pros and cons. Don't be
blinded by a cheap proposal that offers half the coverage at
half the price. Your warranty contract is an investment in
your vehicle's future, it should be based on practical needs
as well as wants. Remember, you get what you pay for!
Do: Have your vehicle
Performing a vehicle inspection is the best way to gauge
just how well your vehicle is aging. This will give both you
and the future warranty company peace of mind about the
vehicle in question. If any of the components do not meet
the pass criteria during the inspection they will need to be
replaced or repaired before warranty coverage can be placed
on the vehicle. Pass criteria should be outlined in your
Brokers, Agents or Internet Sites inspection form. Any
warranty company not getting an inspection is setting you up
in the future for a possible claim denial.
Warranty Buyers Don'ts:
Here is a list of don'ts we have compiled to help you
find a good company to purchase an extended warranty from.
If you're dealing with an individual or company that's falls
into these categories, you should carefully consider who
your dealing with. You may be unknowingly playing the shell
Don't accept any substitute
contracts. Always get a copy of the contract before you
commit to purchase anything. Don't settle for a word
document, a brochure or someone's word of promise, This is a
sure way to loose your hard earned money. Most online
warranty companies have the contracts they sell in Adobe PDF
reader files. These files can be emailed or downloaded over
the internet and viewed if you have the Adobe Reader on your
computer. If you don't ask the company mail or fax you a
contract. If they refuse or are overly concerned about
sending a contract by mail or fax, walk away. Be advised
that contracts sent by fax can be distorted and unreadable
on poor quality fax machines.
If you are buying from the dealership asking for a contract
is especially important. When ask for a contract the finance
manager will hand you a brochure with a list of what is
covered by the warranty. You will probably be told that they
don't have a real copy of the contract, however rest assured
if you decide to buy, somewhere in all of the paperwork you
are required to sign at closing there will be a contract. If
they can produce a contract for buyers then they can produce
a copy for you to review. Caveat Emptor, let the buyer
Don't accept anything less
than a contract where the company and/or administrator is A
Rated by AM Best. Ratings for a re-insurer are worthless,
don't be fooled. Go to AM Best and lookup the company
names listed on the contract(s) you are considering. If you
can't find either one listed at AM Best, you should keep
shopping until you find one that is. If the company has
proper financing, they are in it for the long haul.
Don't be mislead about
canceling. Some companies as well as dealerships will
tell you that once a warranty is purchased it can't be
cancelled. This is a lie! Any extended vehicle service
contract can be cancelled at any time, even if it has been
financed into your monthly payment. If you are told this
call your State Insurance Commission or Attorney General's
Office and report the dealership or company. Each state has
different regulations concerning extended warranty
contracts. Be sure to read through this section and find the
laws concerning your particular state. Know your rights!
Don't send money in advance
for anything. There are still some internet marketing
companies that require a deposit before you can receive a
contract. Don't send money, give your credit card number or
checking account information to anyone in advance for
anything! No legitimate carrier will ask for cash in
advance. Run from those that do.
Beware of companies that
won't take NO for an answer. If you decide to buy from
one warranty company and another company continues to call
and becomes a nuisance, don't be afraid to hang up the phone
or tell them DON'T CALL ME ANYMORE. If they become abusive
report the problem to your local phone company. If you have
already bought be courteous, you did ask for the information
to begin with.
Don't be mislead about
overheating. Many extended warranties have provisions
for overheating addressed specifically in the contract, this
is not unusual. However, you should be cautious of contracts
that exclude coverage as a result of overheating for any
reason. This is a easy out for a warranty provider. Be sure
that you understand the language of your contract completely
Beware of companies that email and call you constantly. This
is a free market economy we live and work in. If you ask for
a quote you should expect a representative to call and email
you from time to time. If you are not interested, then tell
them. If you haven't made a decision and need more time, ask
them to call in a few days or weeks. You can't expect to
sales people not to sell. However, if the calls and emails
become constant, you should take action to stop them. Take
the time to answer and educate them if you are still
interested. Professional organizations do follow up and make
sure you have everything you need.
Don't get passed around.
Many companies have several sales representatives and you
may from time to time speak with different people. Try to
stick with one person, this makes for better communication
and eliminates the possibility of a misunderstanding. Simple
follow up calls are acceptable, because if they sent the
real contract out you have all the facts necessary to make
an informed decision.
Beware of the "better hurry a rate increase is coming soon"
scam. Occasionally a rate increase will take place without
notice, but in most cases warranty companies give notice of
an increase. Don't ever fall prey to the "you have to buy it
today" scam. Cost increase happen in every industry.
Mileage, years on vehicles and other factors do happen, so
do not be to surprised if the rate you got 2 months ago is
Beware of companies that ask for an out of state mailing
address. If they need another address in means they can't
legally write insurance in your state. Your coverage may be
worthless in this event. When in doubt contact your State
Insurance Commission to verify the companies ability to
offer coverage in your state. These laws apply most notably
to California and Florida. If you live in one of these
states and have a legal out of state address or dual
residency, you can legally purchase insurance without
penalty. A vehicle service contract is not insurance, so by
doing this, coverage is good anywhere in the US and Canada.
State Insurance Commission Web Sites
Beware of the redirect. Many companies spend more time
trashing their competition than communicating the facts
about their own warranty contracts. If the answer to your
question is a redirect to the inadequacies of another
company's contract, then you should reconsider who you are
dealing with. If a company can't sell it's own warranty on
it's own merits, then it's probably not worth buying.
Don't be naive. There are
countless scams out there to get you to buy an extended
warranty. The simple truth is, if you are going to
invest your hard earned money you are going to have to ask
some questions and do some research. It may take a few days
or even weeks to get all the answers you want. However, it
will be worth it's weight in gold when you do decide to buy.
Many consumers think that there are thousands of good auto
warranty companies to choose from on the internet, this is a
false assumption. There are a few companies that have been
in business for many years and have good financial backing,
but for the most part you can count them on two hands. Do
all the due diligence you can, and speak to a knowledgeable
person. Many companies have boiler rooms or people who have
just started in the business. Do not waste your time or
Beware of the best warranty on the market syndrome. Everyone
can't be selling the best warranty on the market or there
would be only one extended auto warranty available. Grand
claims and promises can't put money lost on denied claims
back in your pocket, be sure about whom you are dealing
with. Don't be timed or shy, ask your questions honestly and
firmly, be persistent. If someone takes offense to that, how
much more will they take offense to a claim. These type of
companies are not worth dealing with. Have a broker, who
works with multiple top carriers, tailor a program to your
needs. This is like an HMO for your vehicle. You cannot get
every little thing covered.