The arena of extended warranties is one that has evolved light years in a short
time. Just 15 years ago, extended vehicle warranties were either offered by the
carmakers or by obscure companies selling a bill of goods. Having been a
service manager, I can tell you horror stories of dealing with these huckster
extended warranty companies that denied every claim that came into their “call
centers” (probably a one-room shack in the middle of Area 51). Story after story
riddled the highways of folks spending good money for perceived coverage, only
to find out later that all they owned was a piece of paper.
The extended vehicle warranty market has evolved. Companies like AIG,
Allstate, AAA, and NAPA have thrown their hats into the extended vehicle
warranty ring, adding credibility and offering genuine coverage to motorists. The
caveat here is to research the company before buying a warranty.
How does a good extended warranty company’s profile look? One company
that comes to mind that is exemplary is WarrantyDirect.Com, which has been in
business for several years and has paid out more than half a billion dollars in
claims. They deal with hundreds of car dealerships nationwide and do business
in 50 states. This is the kind of profile you want to see when selecting an
extended warranty company.
Questions to ask before purchasing an extended warranty
Who is the warranty administrator? Do they have a good track record? How
many car dealers do they work with? (If car dealers work with them, as well as
sell their policies, chances are the company is easy to deal with when you have a
claim.) Are they difficult to deal with when settling a claim?
To whom do you ask these questions? The best person is the service
department manager or writer. These people deal with extended warranty
companies all the time so they know who is reputable and who is not.
Make sure you know what’s covered and what’s not, as well as what your
responsibilities are to the agreement. Some companies require the use of a
particular chemical during scheduled maintenance. For example, the Wynn’s
product warranty brochure reads like this:
Wynn’s Product Warranty program offers a system of specially formulated
automotive chemicals that are backed by the company’s warranty on the
product’s performance. The program consists of a full supply of specially
formulated chemicals that are designed to prevent the breakdown of
internally lubricated components of a vehicle such as the engine,
transmission, rear drive or transaxle, and power steering components. The