Extended Auto Warranty - What Are the Benefits?

 An extended auto warranty sometimes referred to as a service contract, a service agreement or an extended service plan is a warranty provided to consumers as part of a warranty program. It is an agreement that offers the same service (shipping and replacement parts) for a specified period of time at a fixed price. The extended auto warranty typically comes from the original warranty provider, the manufacturer, or the dealer. Today, more than ever, many extended auto warranties are offered online.

If you own an extended auto warranty and your vehicle breaks down, there are a number of different things you can do. You can tow your vehicle to a garage and have it repaired there. However, often the expense of having your vehicle towed can offset the savings you might receive from receiving an extended auto warranty. In addition, even if your vehicle is fixed, you may still want to have it towed because of the expense of gas. And, of course, if the extended auto warranty does not cover repair costs, you will have to pay those costs.

You can also elect to pay a deductible for repairs to your vehicle. This deductible can be as much as $50 per year, although this amount will vary according to your location. If you elect to pay a deductible for repairs, you will have to pay the difference between the current market price of your vehicle and the amount of your deductible. The majority of extended auto warranties have a standard level of coverage for such unexpected events as accidents, theft, and fire. There are other options that you can select.

You may also elect to purchase a separate service contract. If you have an extended auto warranty coverage on your vehicle, you may be able to purchase a separate service contract to provide for repairs to your vehicle. Service contracts offer many advantages, including the fact that they save you money by providing extended auto warranty coverage at regular intervals. For example, if your vehicle is involved in an accident and requires repairs, you would have to purchase another service contract to provide coverage.

If your vehicle's transmission functions properly, but you do not own the car, you can purchase a separate extended auto warranty plan that covers repairs to the transmission. When you purchase this coverage, it is important to note that you will not be responsible for any damages to your vehicle or any liability charges. In most cases, you must purchase this type of extended warranty during the "lifetime" of your vehicle. Although you may elect to purchase this type of warranty during your vehicle's "potential" life, this may actually cost more because it involves higher premiums.

It is important to note that many automobile warranties will require you to pay for any potential repairs. Therefore, if you do require emergency repairs, you may want to look into an extended auto warranty. In many instances, your dealer will be able to assist you in finding a policy that meets your needs and will meet your budget. If you are interested in buying an extended auto warranty from your dealer, your broker may be able to provide you with useful advice regarding several companies.

While purchasing extended auto warranties from your dealership is the most cost-effective method, you should remember that there are service contracts available at other locations. For example, many new car dealerships offer full vehicle service contracts. If you purchase this type of service contract instead of an extended auto warranty, you will not be responsible for any repairs to your vehicle during the duration of the agreement. However, if you require repairs while your vehicle is in the dealership, this option may provide you with the best price.

Extended warranties and service contracts are beneficial to consumers for several reasons. For example, they offer peace of mind because you know that any repairs to your vehicle will be covered by the warranty. They also reduce the overall cost of ownership because the dealership will no longer need to pay for repairs. Finally, these warranties and service contracts can save you money by providing you with coverage for major repair costs. Shop around before purchasing any type of extended auto warranty or service contract so that you can find the product that is right for you and your family.