What is an extended auto warranty?

An extended auto warranty is insurance against costly car repair bills. The warranty is a contract between you and the warranty company that they will pay for any needed repairs to your car covered by the agreement.

SmartAutowarranty.com - Warranties cover those unexpected costs that always seem to happen when you can least afford them. The peace of mind that an extended auto warranty brings can be wonderful! You never have to worry about expensive repairs, and you can save hundreds if not thousands of dollars!

What's the risk?

The risk is that you may end up paying more for the warranty than you will for the actual repairs during the period covered by the warranty. While an auto warranty provides peace of mind, there is a possibility that you may never need it. Depending on the reliability of your car, the relative cost to repair it, and your luck, you may not feel that the peace of mind provided by an extended auto warranty is worth it.

Before you commit to an extended auto warranty, be sure and take the time to explore the details of the various coverage options. You can save hundreds of dollars by comparing extended auto warranty quotes to find the best deal. Policies can differ in terms of price and coverage. So be sure and read the fine print!

Do you really need an extended auto warranty?

Your vehicle is probably one of your biggest investments, and an extended auto warranty will protect you if anything goes wrong. The average major repair is over $2,000, and with the complexity of today's vehicles, one major repair will typically cost more than the extended warranty.

When you buy an extended auto warranty, you are betting that the cost of the warranty will be less than the cost of repairs when your car breaks down. Before you buy a warranty, think about your particular car. Is it the kind of car that will run for 100,000 miles just by changing the oil? Then you might not want to pay for an extended warranty. But there really aren't many cars like that, so if you have an average car then an extended auto warranty can be a great deal. It's also worth thinking about whether you can really afford to make a large lump-sum auto repair payment, if something goes wrong. If you need to keep your car on the road no matter what, then purchasing an extended auto warranty is well worth it.

Extended auto warranties are useful for both used and new cars. Of course, there is no need to buy an extended warranty for a new car if you're not going to keep it longer than the manufacturer's original warranty. But if you're planning on keeping it longer, consider buying an extended auto warranty. Keep in mind that you do NOT have to purchase the plan offered by the dealer. You can almost certainly save money by researching different options and purchasing your extended auto warranty from an independent company.

When should I buy an extended auto warranty?

Coverage is generally less expensive the earlier you purchase it. As your car gets older and racks up mileage, the price for coverage goes up. The newer your car, the lower the price is, and the longer the available terms are. The warranty company will usually take into account the time left on your original manufacturer's warranty and this will help to reduce the cost.

What should I look for in an extended auto warranty policy?

What's Covered

Make sure that the most expensive repairs to your car will be covered. These are usually to your engine or power train, which includes your transmission and differential.

How Your Claim is Handled

Find a company that handles all the details of your claim, and be extra sure that you can use the auto repair shop you choose. Don't buy an extended auto warranty that requires you to go to their preferred provider. You should be able to go the mechanic that you feel the most comfortable with.

The warranty company should pay for all claims directly and they should cover all parts, labor and sales tax. They should not limit the number of claims you can file nor restrict the kind or brand of parts that may be used.

You should also make sure that the extended auto warranty company you are considering will pay the full labor rate for the auto repair shop and not just the hourly rate designated by a repair guide.