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Why Do You Need an Extended Warranty
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| Reasons to consider and tips to help you determine the most cost-effective options. |
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| Updated |
Jun 10, 2004 21:21:50 |
| Rating |
 41 ( -6 -14.63% ) |
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Description:
Most new vehicles come with a factory warranty, and most last 3 years, or 36,000 miles-whichever comes first. For used cars, federal law dictates that any warranty information must be posted on the window, or prominently displayed inside. These forms are uniform, and tell you what service contract may exist on the vehicle-or what is available. Extended warranties are more cost-effective and important than ever.
Extended Warranties are also known as Vehicle Service Contracts or Mechanical Breakdown Insurance Policies. Here are reasons to consider purchasing an extended warranty and tips on the most cost-effective option:
If you're planning to keep the vehicle for 4+ years, or have a 4-5-year loan, that makes you responsible for increasingly costly repair bills.
It enables you to reap the dramatic price benefits of buying a pre-owned car, without inheriting the risk of expensive repairs. The contract will, usually, pay for itself many times over.
According to J.D. Power & Associates, the average person-even though they may want to trade in every few years-actually keeps a vehicle 6.2 years. This leaves the average consumer unprotected for 3+ years. With an extended outrageous repair bills are covered.
Car repair is more expensive than ever, because vehicles are much more complex-with high-tech, pricey electrical systems and computer parts throughout. GE Capital estimates the cost of an average engine replacement at $2,714, and a transmission at $1,947. Minimum repair bills run $300, and more often, at $500.
The improved quality of today's vehicles has made warranties both more comprehensive and affordable.
When you purchase an extended warranty, you don't have the hassle of worrying whether a mechanic may be selling you a repair you don't need. It's the job of your warranty provider to make sure your car is fixed responsibly-and that all appropriate work is done.
Vehicle Service Contracts, such as offered in the Autobytel.com Warranty Program offered online, pay for much more than simple repairs. It also covers automatic rentals when your car's in the shop, towing, and meals and lodging when you break down on the road, complimentary roadside assistance, authorized repairs even if the claim office is closed, and a lifetime deductible that does not charge you a second time if the part breaks twice, etc. etc.
Autobytel.com's warranties include the ability to transfer your contract to anyone that buys your car. You will be able to sell the car for more money-often recouping the entire cost of the contract. Buyers simply love risk-free vehicles.
Extended warranties increasingly let the consumer choose the degree of coverage and the deductible-based on the number of miles you drive and the make and model and its predicted reliability. There are more choices, and more customized levels of coverage.
Earlier policies (10-20 years ago) usually only covered basic items on newer cars with low miles, and they were more expensive than current policies. Better-made, longer-lasting vehicles have changed that. It's now affordable to protect an older car, with many miles.
Increasingly, consumers are buying more extended warranties through independent service contracts (rather than through dealers or the factory). 15-20 years ago, there were problems with many independent providers-the companies were small and many were unable to pay claims. This hurt the independent extended warranty business' image. However, these companies, like vehicle service contract provider at Autobytel.com, are backed by large, very stable insurance companies. Autobytel.com's vehicle service contract insurer is Fireman's Fund Insurance Company, which achieved the highest possible AM Best rating of A++. If you insure a new or used car with vehicle service contracts backed by these strong insurance companies, you're safe.
Extended warranties let you relax and enjoy the vehicle-no more worries about strange noises from under the hood, fearing that one repair could wipe out your bank account. |
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