Angie's List: Extended Warranties

Should you buy the extended warranties for your car?

In this Angie’s List report you will get advice on when and how you should shop around for the best deal, and when it makes sense to skip the extended warranty altogether.

Commonly called an "extended auto warranty," it's a prepaid service contract or vehicle service plan. A service plan is separate from the original manufacturer's warranty, which is included in the price of a new car.

"An extended auto warranty typically picks up coverage after a certain number of miles or a certain number of years oftentimes after the manufacturer's warranty has expired,” explains Angie Hicks Founder of Angie’s List. “If you're going to be driving your car for a long time it might be something you want to consider."

Service plans pay for specified repairs over a defined number of years or miles. Vehicle manufacturers, auto dealers, or independent third-party providers offer the plans.

"When shopping for an extended warranty take your time and do your research,” says Angie. “It's an important decision because the warranty is only as good as the company that stands behind it. Don't feel pressured to buy one on the spot and make sure you understand the fine print."

Another important thing to remember about these extended warranties, they do place some responsibility with the vehicle owner.

"When looking at auto warranties, one thing that's important to remember is you need to do proper maintenance,” explains Angie. “In some scenarios the warranty might be voided if proper maintenance isn't done."

According to Consumer Reports, the average cost of an extended warranty is about $1,000, with an average benefit of $700.

And that could be reason enough for many folks to steer away from one.

Content:
Commonly called an "extended auto warranty," it's a prepaid service contract or vehicle service plan. A service plan is separate from the original manufacturer's warranty, which is included in the price of a new car.

Service plans pay for specified repairs over a defined number of years or miles, after the factory warranty expires. Vehicle manufacturers, auto dealers, or independent third-party providers offer the plans.

According to a nationwide Angie's List poll:
• More than half of the respondents have purchased an extended auto warranty - also known as an auto service contract.
• 83 percent say they know what their warranty covers.
• 43 percent paid more than $1,000 for the warranty.
• Of those that purchased a warranty, 66 percent did not shop around for the best deal.
• 44 percent have not used their warranty.
• 43 percent believe the warranty provides enough value to be worth the cost.

Angie's List Tips: Extended auto warranties
• Do you need one? An extended auto warranty isn't for everyone. If you change cars every three years, an extended warranty makes no sense, because the manufacturer's warranty is likely still in effect. But if you drive a car for several years, it may be something to consider.
• Buyer beware: Be wary of phone and mail solicitations from third-party companies to renew your original factory warranty. Avoid high pressure tactics used by some telemarketers; ask for details in writing. Don't provide personal financial information such as your bank account, driver's license number, credit card number or vehicle identification number to third-party companies before thoroughly vetting them.
• Do your homework: Research the company. Check with your state's attorney general office for any complaints. Shop around for the best price: Don't be afraid to negotiate and make sure you understand what's covered in the contract. Ask about the cancellation policy: Most contracts can be canceled in 30 or 60 days for a full refund.
• How does it work? Before you sign anything, understand details/costs of the coverage, deductibles, etc. Ask if the repairs can be done by any auto repair company or if you are restricted to specific ones. And keep detailed maintenance records since many warranty plans may void coverage if you fail to do specific maintenance.


Comments are posted from viewers like you and do not always reflect the views of this station.
powered by Disqus
WNDU - Channel 16 54516 State Road 933 South Bend, IN 46637 Front Desk: 574-284-3000 Newsroom: 574-284-3016 Email: newscenter16@wndu.com
Gray Television, Inc. - Copyright © 2002-2014 - Designed by Gray Digital Media - Powered by Clickability 179714711 - wndu.com/a?a=179714711