Car Repair Extended Warranties What to Think: Taxis and Automotive Automobile Reviews

Car Repair Extended Warranties: What to Think

These Auto Service Contracts Should Be ScrutinizedNo matter what you call an automobile extended warranty, it can be fertile ground for fraud and deception. The chance for both exists in everything from the sales process to the delivery of service. Knowing how to protect yourself from being ripped off, how the industry is structured and how to decide what kind of contract is right for you, can save you money and aggravation.

First, as the Federal Trade Commission points out at their web site these agreements are not warranties but actually service contracts that “promise to perform (or pay for) certain repairs or services.” Warranties come with new cars and are incorporated in the original price. The FTC recommends that you take steps to protect yourself from being ripped off. Fast talking, high pressure sales people should be shunned like reruns of the Brady Bunch and you should protect your personal financial information (social security number and such) like it’s a winning power-ball ticket.

You should distinguish between the company that sells the service contract, which is really a broker, and the contract administrator or service contract provider who is responsible for paying the claims. Both these entities merit scrutiny. The FTC recommends that you check with your state’s licensing authority since some states have very stringent statutes controlling these contracts. Consider your Attorney General’s office of consumer protection and the Better Business Bureau as resources for your investigation.

Next, think about what you plan to accomplish by purchasing a service contract. Is the idea to cover only the replacement of a major component of your car, like a motor or transmission? Or maybe your plan is to keep everything from the light in the sun-visor to the electric trunk release working just like it did when it rolled out of the showroom? What about your financial management goals? Are you trying to minimize large unexpected expenses or just level out your auto repair expenses over the life of the service contract? More importantly, how long do you intend to keep this vehicle, maybe you should not be in the market for a service contract?

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Car Repair Extended Warranties: What to Think

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Automotive Automobile Reviews

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