It is becoming increasingly common for you to find an extended auto warranty offered at auto auctions. This trend was largely due to many people’s hesitation to purchase vehicles at auto auctions because they were unsure about the reliability of the vehicles. It seems like for every story you see about someone getting a great deal, there is another story about someone purchasing a vehicle which broke down rather quickly. Now that extended warranties are becoming more common, it is no surprise that more people are trusting the car auction process. Here’s a quick look at what an extended warranty is, what it covers, and how you can benefit from them.
What is an Extended Auto Warranty?
In general, and extended warranty will cover breakdowns due to electrical or mechanical failures. They tend to not cover problems that would be prevented with normal maintenance, accidental damage, or resulting from general wear and tear. If you purchase a new car there is a manufacturer’s warranty attached to it which normally covers 3 to 10 years. The problem is that this warranty normally only applies to the first owner, which means if you purchase a vehicle auction you will not qualify for it. This is where an extended warranty comes into play. It is not an extension of the coverage provided by the manufacturer’s warranty, instead it is a completely new contract which is provided by a third-party.
There are three basic types of extended warranties which are available. The first is known as a powertrain warranty. This covers only the drivetrain and will normally only benefit you when purchasing a higher mileage vehicle or if you tend to put a lot of miles on your car on a regular basis. Normally this type of extended warranty is fairly inexpensive, however if you do end up needing it will save thousands of dollars. The second type of extended warranty is known as bumper-to-bumper coverage. This will cover all of the mechanical systems within your car and is considered to be the most common type of extended warranty to be found at auto auctions. One thing to keep in mind is that some of these bumper-to-bumper warranties will specifically exclude certain types of repairs, so make sure to read it thoroughly. The final type is a named component extended warranty. This warranty will cover a specific list of components, which normally includes all of the major mechanical parts.
How to Get the Extended Warranty at Auto Auctions
There are two different ways that you can get an extended warranty at auto auctions. The first option is that the warranty is included with the purchase of the vehicle. This is not something you should bank on because most vehicles at auto auctions are sold as is. In most cases, if the extended warranty is included with the vehicle, it will be on a newer vehicle which was likely repossessed.
The most common way to get an extended warranty at auto auctions is through the auction itself. Many auction houses and online auto auction websites are teaming up with an insurance company which provides on-site extended warranty services. This means that there will be different extended warranties available at different auctions. As a result, you should always take a few minutes to find out which insurance company has teamed up with the auction.
How to Get the Most Benefits from an Extended Warranty at Auto Auctions
In order to get the maximum benefit from an extended warranty is by comparison-shopping. While the warranty offered at the auction will likely be your best option, that isn’t always the case. By showing up to the auction with at least one other option, you’ll be able to make a more educated decision.
In general there is a lot of debate over whether an extended warranty is a good idea. Some people argue that if you regularly maintain your vehicle and simply set aside a little money each month you will be able to easily afford any repairs that may come your way in the future. The reason that this doesn’t apply to auto auctions is because you don’t have a chance to drive the vehicle before you buy it and because you don’t have that additional buffer of time to save money. If your car has issues, you will likely find out about them fairly quickly. As a result, an extended warranty provides you with an immediate benefit and immediate savings.
