Consumers are frequently offered extended warranties by car dealerships when they buy new or used cars. However, not all third-party extended warranties are created the same. The ones offered by reputable car dealers are fine but many third-party ones are not. Here’s what you should know:
Definition of “third party”
A third-party warranty has the name it does because it’s not directly involved in the transaction between two parties. In a car sale’s case, the first party is the car dealer and the second party is the vehicle buyer. A third-party is another involved entity, like a company selling an extended warranty.
Consider if you need one
Be sure that you need a third-party extended warranty before you sign onto any one that may be offered to you. It is a smart idea to research available options and what they may include, including any deductibles, before you head down to the dealer. Google the company that offers a warranty you’re considering and look for complaints and feedback from customers. Also think about checking with your state’s Consumer Protection office. Another place is the your state’s Better Business Bureau web site.
As we brought up, a third party extended warranty offered by a reputable car dealer is bound to be a great thing to have but the others out there may be iffy. The issue is that many seem to have excellent coverage and are quite affordable but the companies that offer them don’t tend to be around for long. And those that still exist, never seem to cover the parts that fail on your car because of numerous exclusions. The bottom line is to know that many third party extended warranties aren’t that good.
Some Helpful Advice
Third-party extended-warranty problems are so widespread enough that the Federal Trade Commission (FTC) put a consumer alert on their Web site years ago. Here are a few of the FTC’s tips to avoid problems along with our own:
Get a warranty from the manufacturer – The best way to prevent yourself from getting into extended-warranty scams is to get coverage with a manufacturer’s extended warranty. For example, if you purchase a Chevy and General Motors offers an extended warranty, you can be sure this is a solid product. These warranties will cost a little more but at least you’ll know that your car is in the right hands.
Thechevysource.com says to be aware of what is covered and what is not – This is often the biggest source of confusion with extended auto warranties. Although they are called extended warranties, they don’t usually work in the same way that your original “bumper-to-bumper” warranty does. Think of extended warranties as service contracts that cut down your costs in the event of high-priced repairs, not for the little things that original warranties do.
Essentially, don’t be afraid of extended warranties when they are from your reputable local car dealer. They can be a great product that reduces risk if you decide to keep your car for a long time. Extended warranties can be great products; they provide peace of mind in the event that your vehicle requires repair after the manufacturer’s new car, or dealer’s used car, warranty has run out.
Article Courtesy of: The Chevy Source