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Questions to ask a car warranty provider

What to know before you buy an extended car warranty

CARCHEX and Endurance Auto Warranty
mechanic looking at car

With extended car warranties, there are no absolutes. No two companies are exactly alike, and they all offer different types of policies.

Once you decide you want to extend your manufacturer’s warranty protection, you should compare at least three to four auto warranty providers. Asking the right questions will help you find the best car warranty for you.

Coverage options

What vehicles are covered under your extended warranty plan?
Most companies will cover cars up to 20 years old or newer and up to 200,000 miles or less. For example, in 2021, the oldest vehicle most companies will cover would be a 2001 model. A few companies take older vehicles and cars with higher mileage, but coverage can be more difficult to find.

“Exotic” vehicles like Maseratis, Bentleys and Alfa Romeos are also harder to find coverage for. You can, however, get coverage for a Jaguar if it's a “non-exotic” model. Nissan has exotic models, even if you don’t necessarily think of it as an exotic maker.

Not very many car warranty companies provide coverage for motorcycles and RVs, either.

What is your limitation of liability?
Always make sure you understand what a warranty company's limitation of liability is before signing on the dotted line.

A limitation of liability could cap the amount of money the company will pay out for certain repairs and overall benefits. Some companies go by the Kelley Blue Book value of your car, while some set their own limit.

Be wary if a company advertises “unlimited liability” — ask to make sure that it will cover all major expenses. For example, if your transmission and engine break down in the same week, are you still covered for everything?

Is this an exclusionary or inclusionary policy?
An exclusionary policy lists the parts and components the warranty does not cover. This means anything not listed in the agreement is covered under the policy. With car warranties, exclusionary is another term for a bumper-to-bumper warranty.

On the other hand, an inclusionary warranty, also known as a named-component warranty, lists the parts and components that are covered by the plan.

Most companies offer tiers of packages. For example, “silver” might be the starting plan that only covers your car’s powertrain or drivetrain. “Gold” and “platinum” packages usually offer more comprehensive coverage. Each company has different names for its warranties.

Does this policy cover wear and tear items, such as tires, or only breakage?
Extended car warranties do not cover wear and tear parts, such as brake pads, belts, hoses, and other wear and tear components.

Some companies offer additional services for tire repair and replacement as part of an add-on package.

If you want a wear and tear warranty, be sure to check that the policy covers wear and tear items.

How long does an extended car warranty last?
An extended warranty covers unexpected repairs, many of which are expensive out of pocket, for a specified period of time or number of miles. Most providers give you a time frame and a limited number of miles.

The most common plans last for seven years or 100,000 miles, whichever comes first. Some plans last for four years or 50,000 miles. Others have longer terms. For example, Endurance covers up to 250,000 miles.

If your warranty is about to expire and you’re close to the mileage restrictions, then it makes sense to renew if you want to keep the same coverage.

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    Costs and fees

    How much does the plan cost?
    On average, a policy costs about $2,500 over a five- to seven-year plan. The most comprehensive plans cost a bit more. You can pay for the plan upfront or make payments. Most companies offer discounts when you pay upfront.
    What are my payment options?
    Most people pay for a car warranty over a few years.

    For example, if you pay $2,500 for a seven-year plan, your payments would be about $70 a month if you pay it off over the first three years.

    Once the plan is paid for, you don’t have to make any more monthly payments. You still have coverage through the length of your agreement — four more years, in this example.

    What is the deductible?
    Each company sets its own deductibles. Some even have $0 or “vanishing” deductibles.

    Be sure to ask about deductibles when you are shopping for a good extended car warranty. The deductible doesn't really say anything about service, but it’s important to know.

    General questions

    What is the claims process like?
    This is one of the most important questions you should ask. Some warranty companies require that you pay for repairs upfront — the auto warranty provider then reimburses you. Other companies, like CARCHEX, pay the shop directly.

    It’s typically more convenient for car owners when the warranty provider pays the shop directly. With the reimbursement model, it can sometimes take months to get your money back. If a company you’re considering using has a reimbursement model, be sure to ask how long it generally takes.

    With direct payments, you might get a warranty card to give to the repair shop. The dealership coordinates with your warranty company to figure out what parts to get and sends money directly — you hardly have to be involved.

    Do I have to sign a contract?
    A car warranty is technically an agreement that you can cancel at any time. Usually, the agreement includes a 30-day money-back guarantee. Past that 30 days, you will likely get a prorated refund if you cancel.
    When should I purchase the extended warranty?
    Newer vehicles are typically covered by a manufacturer’s warranty. A good rule of thumb is to get an extended warranty 30 to 60 days before that coverage ends. That way, you’re still covered during the standard waiting period.

    In some cases, the sooner you purchase an extended warranty, the less expensive it is. As your vehicle gets older and parts wear out, there is a higher chance you’ll use the warranty — companies charge more because of that increased risk.

    Bottom line

    Always call multiple companies when inquiring about extended car warranties. Asking these and other questions before you sign for the warranty could save you a lot of money. For more, read further to see if now is a good time to get an extended auto warranty.

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    The ConsumerAffairs Research Team believes everyone deserves to make smart decisions. We aim to provide readers with the most up-to-date information available about today's consumer products and services.