Extended Warranty.

Extended warranties are supplemental agreements between you and the dealer, the manufacturer or the independent insurance company. Whenever possible, purchase the extended warranty issued by the vehicle manufacturer. This guarantees you service on a nationwide dealer basis. Many independent contracts are honored only at the dealership that sold them.

There are many reasons to purchase an extended warranty. Your vehicle is one of your biggest investments. An extended warranty will ensure it is always in the best mechanical condition. With the complexity of today's vehicles, one major repair often costs more than the extended warranty. Hourly labor rates can top $100 or more per hour in some markets. Extended warranties ranged from $79 all the way to $800. In percentage terms, the price for the service contract was between 6% and 42% of the price of the TV. The average, however, was more like 15% to 20% of the product's price.

You won't find any warranty company foolish enough to offer coverage on vehicles like Land Rover (poor quality, frequent and expensive repairs), Mercedes AMG ($20,000 engine), and some turbo engines like Porsche, etc. You should ask them why.

If you do find a warranty company stupid enough to cover these cars, you can bet they won't cover wear and tear failures, and they'll try to get out paying repairs. Then you can be your own extended warranty.

Who should not buy an extended warranty? Extended warranties are a waste of money for lazy owners.Timely vehicle maintenance is a demand of any reputable warranty company. So, if little Joe Jr. is heading off to college and you have the slightest suspicion that he might skip an oil change or spend the bucks you send for brake pads on beer, don't waste your money on an extended warranty.It's also important to keep records, so when a claim is filed maintenance of the vehicle is never an issue.

You should know Car warranty companies pay to have their banners here. The extended auto warranties here will do good for you. One scam is when a car dealer sells you an extended warranty, then without your knowledge, cancels the warranty, and has the funds refunded back to them. How about buying from the dealership? Salespeople aren't the only ones working on commission at many dealerships. The finance guy and the service manager also often have a commission motivation to sell you a warranty. They will even offer to wrap the price of the warranty into your loan. You won't only be paying multiple commissions; you'll be paying them at 6 to 10% interest for years! That is why it is not unusual for a dealership's extended warranty to cost two to three times more than one you can purchase directly from a warranty company.

This is the company responsible for paying your auto warranty claims. Be careful, it is often not the company you buy coverage from. With you also deal directly with the administrator. An extended warranty is a major investment. You need comprehensive coverage, consumer friendly contract language, freedom to choose your repair facility and no paperwork or billing hassles; not to mention a financially stable company with a proven track record.