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.