A: New and pre-owned vehicles with relatively low miles typically come with some type of warranty protection. But what happens when that warranty expires or you purchase a vehicle out of manufacturer’s warranty? Consideration of an extended warranty depends on your tolerance for risk, the reliability of the vehicle, the vehicle’s remaining useful life and the reputation of the extended warranty company. Automobiles today are more reliable than ever, so do your homework. Extended warranties are not insurance. They are also known as protection plans, maintenance agreements, service contracts and even prepaid repair contracts. However, all contracts are not created equal. This is where your research and coaching from a mechanic or dealer you trust comes into play. Remember that you are purchasing a machine, and machines can and do fail. Assuming you do all manufacturer’s recommended maintenance, what can you anticipate in mechanical failures? Your research could lead you to the specific warranty options that make the most sense for you.
You can purchase warranties through an auto dealer or from after-market companies. It’s convenient through the dealer at time of purchase and can often be rolled into your financing. Prices are all over the board, so again, do your homework and compare. Remember that your arrangement is through the service administrator, not the dealer. Be wary of after-market warranty solicitations after purchase. Check with the Better Business Bureau and research the quality and service of the company. Our experience is that you get what you pay for.
Information provided by Tab Miller and Mona Lillard, Preowned Solutions, 11010 Douglas Ave., Urbandale, 515-528-8100.