When going to a store for shopping, we always talk to the sales person about the quality of the product, price and the warranty it comes with. Most electronic appliances come with about a year’s warranty, and if we need more, we can pay and get what is called an extended warranty. This is safe for products that are expensive and warranty is a must especially if they get into some problem or repairs need to be done. For cars too, the concept of warranty is important, most cars come with 2year warranty and for people who want more, they can pay up an additional sum and get a 5year or even 10years warranty. This ofcourse varies with the country, and product, so check with your dealer on the cost of an extended warranty before signing on the dotted line

Even though it sounds easy, there is more than what meets the eye, so it is better for the buyer to be aware of what he is getting into when buying an extended warranty.

1. What does it cost:
How expensive or inexpensive will the extended warranty work out to? You need to calculate the cost of the car and add to it about 20% more to calculate this figure. There might also be some dealers who have different rates for different models of cars, so be sure to understand this before taking it up. Evaluate the pros and cons of pickling an extended warranty, for at times people who are in the habit of changing their cars every 2years will not need one, they will only be shelling out cost for no use.

2. What does it cover?
Warranty is extra protection for the product, which in this case is an automobile. If the spare parts are very expensive, then it makes sense getting extended warranty. Find out the cost of parts that are most likely to fail, or wear out and compare that with the cost of the warranty. It also ensures you get free service for any little problem you might face – like a sound coming from the engine, or window not working alright, and so on.

3. How prompt is their service?
Does the car company have a good on the road service? This means, you can travel to any part of the country and be assured of someone coming to your rescue the minute you have a flat or your battery dies on you. All this will be included in the warranty that you buy, and if the repair falls within the duration of the extended warranty.

When you are at a car dealer’s office, have a discussion with the manager in charge to understand the terms offered by them on the extended warranty. If it suits your needs, and what you had in mind, go ahead. But if it seems too expensive, or you know the car will not get into serious trouble, you can forego the same, taking a risk with the car.

Buying an extended auto warranty has become very common nowadays, with an extended warranty becoming more and more of a need and less of a convenience. So in case you have already not bought an extended auto warranty for your car, then it is high time that you did. However, there are certain important things that you need to keep in mind before buying an extended auto warranty. Some tips that will make you buy smart when it comes to extended warranties are:

Always go for wear and tear warranties: An extremely large number of auto warranties do not cover any repairs or replacements which occur as a result of wear and tear or overheating. However, the maximum number of car problems and replacements arise due to constant wear and tear and sudden breakdowns are the exception rather than the rule. So it is wiser to pay more and get an extended auto warranty that covers wear and tear instead of buying one that only covers mechanical breakdowns, since you will definitely end up saving more in the long run by going for the former.

Get a discount and buy your auto warranty: If you have good bargaining skills, then you should be able to land a substantial rebate on your new car. Instead of spending this money on a new car party for your friends, put this to good use by buying your extended car warranty right at the time that you buy your car. However, go for an online warranty company since these are the ones that offer you the best warranties at the lowest prices while dealers are generally known for giving you the worst ones for the highest prices.

Do your homework: An extremely large number of people get very dissatisfied with their auto warranties because they do not attempt to understand the terms and conditions of their warranties before they buy them. Therefore, it is always advised that you first analyze your own needs and then shop around for a warranty that gives you everything you want for the best price. Make sure that you get to read everything about your warranty before signing on the dotted line, paying special attention to the fine print.

Check companies for credibility and payouts: Extended warranty companies do not work alone and need to be backed by an insurer or administrator. This company and not the one selling you the warranty will pay for your claims, so it is important that you verify the credibility and standing of both the companies involved in providing your extended auto warranty before buying one for your car.
Shop around: Online extended warranty companies will provide you with their warranty quotes for free, so there is actually no effort involved in shopping around for the best warranty possible. This can help you in saving thousands of dollars, since there is a large difference in quotes for similar warranties from different companies.

Extended auto warranties are becoming the need of the day as repair rates and the cost of spare parts keep on rising to painful heights. While getting an extended auto warranty on your car or truck can actually save you from huge amounts of unplanned and unbudgeted expenditure, the amount of money that you will save and the probability of your extended warranty company paying for your repairs certainly depends on a lot of factors, out of which the most important ones are the credibility of the warranty company and the kind of extended warranty that you go for. While doing a little bit of research about payouts and service among friends and colleagues can easily guide you to the right warranty company, we will tell you here about the most common types of extended car warranties, so that you can choose the one that suits your needs and your budget the most instead of going for a warranty that does not pay for the kind of repairs that your vehicle needs.

The Basics: Before we talk about different kinds of extended auto warranties, you need to know about the two main categories that auto warranties fall under. We can broadly divide auto warranties into “Wear and Tear” and “Mechanical Breakdown” warranties. The majority of auto warranties being offered nowadays are mechanical breakdown warranties, and they are more popular because of being cheaper than wear and tear warranties. However, while mechanical breakdowns will cover malfunctioning parts that misbehave because of sudden breakdowns, they do not cover any faults that arise due to wear and tear. However, the majority of car problems rise because of wear and tear and there are hardly any faults that occur all of a sudden or out of the blue moon. So while a regular mechanical breakdown warranty will not cover your wear and tear related repairs, in most cases, companies will get out of all kinds of payment claims by blaming wear and tear for almost all your car problems. By going for a mechanical breakdown warranty, you only end up paying the warranty company without getting anything in return. Make sure that whatever kind of warranty you go for, it covers wear and tear. Read the fine print if it is not clearly specified and never buy a warranty till you know all the terms and conditions that come with it.

Now that you know about the two main types of extended auto warranties, some sub divisions that you might come across are:

· Bumper To Bumper/ Exclusionary Auto Warranties: Covers almost all auto parts except the ones that are provided in an exclusionary list. Make sure you read the exclusion list in order to ensure that nothing crucial is missed out.

· Named Component Auto Warranties: These warranties cover all the components named in the warranty while excluding others. They are not like bumper to bumper warranties and may exclude certain crucial parts. However, they are cheaper than exclusionary auto warranties and you can go for them if you have a reliable car or want coverage only for crucial or costly parts.

· Luxury Auto Warranties: One of the costliest warranties around, these are recommended for people who own cars with luxury components like emissions systems, DVD players, drop down screens, GPS, navigation systems, phones and internet access systems. The warranty offers basic bumper to bumper coverage plus coverage on these luxury components.

With almost everybody going in for extended auto warranties on their vehicles, a large number of companies offering the same have mushroomed up both online and offline. Unfortunately, the sole aim of many of these companies is simply to make money from the consumer without offering him or her anything in return apart from a piece of useless paper. If you want your extended auto warranty to actually save you money, then make sure that it covers the following—
Wear and Tear: The maximum number of car problems arise because of wear and tear, but most warranties do not cover this unless and until you specifically go for one that does. Always go for an extended auto warranty that will pay for repairs resulting from wear and tear, even if it costs a little more.
Overheating: There are a large number of extended auto warranties that will not pay for repairs or replacements if a part malfunctions because of overheating. This is something that is generally mentioned in the fine print, so be careful that you read this clause and get it omitted somehow, since it is highly expected that you might have to go in for very costly repairs as a result of overheating, especially if you have ABS brakes.
Rental and Towing: One more very significant cost that most warranty companies do not want to pay. Rental and towing charges can easily burn a hole in your pocket if your car gives up somewhere far away from a garage, and this is a common occurrence on highways. Make sure that your extended auto warranty covers both rental and towing charges for your vehicle.
Direct dealing between customer and repair shops: There is no dearth of warranty companies that will make you pay for repairs first and then make you grovel to get your money back. It is definitely a much better option to choose a warranty company that pays the repair shops directly without your having to part with your cash whenever you take your car in for repairs.
No deductibles: There is actually no point in going for an extended car warranty if you have to pay a certain amount of money every time you take your car to the mechanic for repairs on whenever you get a part changed. It is much better to pay a little extra and go for a full fledged warranty that does not require you to pay anything apart from the warranty charges, period.
Transferable: You never know when you might plan to sell you car, but if and when you do, a car warranty that accompanies your car even when it changes hands can really help you in getting a better deal for your car. Buy an extended car warranty that gets transferred with the title.
Money-Back guarantee: While most reputable warranty companies will not disappoint you, now and then, everybody lags back when it comes to delivering good service. Almost all good companies offer a sixty day money back guarantee if you are not satisfied with your auto warranty, so make sure that you buy one that gives you this option too.

A large number of people are going in for extended auto warranties for their cars in order to safeguard themselves and their bank accounts against expensive repairs. Extended auto warranties are just like normal warranties that will cover the costs of repairs and maintenance of your car for an agreed-upon period of time. However, unlike real warranties, the cost of an extended auto warranty is not included in the cost of your vehicle and you have to pay extra in order to avail it. In fact, an extended auto warranty is better defined as a service contract whereby an automobile owner pays a warranty company some amount in order to get his or her car covered by an extended warranty. Extended auto warranties differ from real warranties in a number of other ways. For one, you have to buy an extended auto warranty by paying extra and it does not come free with your automobile. Secondly, an extended car warranty starts only when the manufacturer’s warranty on your vehicle expires.

It is mainly because of the second reason that buying an extended car warranty is extremely important. Most manufacturers cover their products till the period they think that their cars or automobiles will keep on functioning properly without giving much trouble. For example, if Honda covers a car for five years, then you can rest assured that nothing drastically wrong will go happen to the car for five years and neither will it require any major repairs or servicing during this period. At the same time, most automobile owners are aware of the fact that they might be in for heavy repair, servicing and replacement bills once the manufacturer’s warranty on a car is over. Therefore, it is best to buy an extended auto warranty that will take care of all maintenance and wear and tear related repairs and replacements once the manufacturer’s warranty on a car runs out.

Many people think that they do not need extended auto warranties because they have bought a car that has a great record and hardly goes in for repairs. In fact, they would be surprised to know that most companies do not even offer extended car warranties on expensive vehicles like Porsches, BMWs and Mercs not because they never need repairs but because when they do, they are very very costly. So no matter what brand of car you own, getting an extended auto warranty is advised if you really do not want to pay through your nose whenever you have to get anything repaired or changed. Even if your vehicle does have a reputation for having an amazing power train, remember that no car can ever avoid wear and tear related repairs and problems, and this is where your extended auto warranty might save you a packet. Another major concern is that there is a variety of new fangled stuff that is bound to err in a lot of today’s cars—sun roofs, DVD players, power roofs and navigation systems. The actual life of most of these instruments is never more than the manufacturer’s warranty and only an extended auto warranty can save you from spending thousands on such repairs.

When buying an extended auto warranty, keep three very important things in mind—

1. Buy your extended warranty as soon as possible, since this is when you get the best rates.
2. Pay extra but get a warranty that is not just “mechanical” or “breakdown” but covers “wear and tear” as well.
3. Go for a warranty with 0 deductibles instead of paying extra cash every time you take your car in for repairs.