Warranties are generally viewed favorably by consumers because they add some protection to a particular purchase they might make. For example, many “big ticket” items such as appliances and vehicles come with warranties. These tend to save the consumer a great deal of money should the product or merchandise have a flaw or failure in car warranty.
There are some problems with warranties, however, and these problems tend to occur where certain “definitions” and “terms” come into the discussion. For example, auto warranties have a lot of flexible terminology that can often be exploited by an auto dealer or manufacturer as a way of getting out of a repair. This is even more the case when an extended auto warranty is purchased, and if someone plans on keeping their vehicle for many years or hundreds of thousands of miles, they will have to be careful about the provider they select.
One issue of frequent concern where consumers and auto warranties are involved is the different types of coverage they can buy. Often they are encouraged or told only about mechanical breakdown coverage. They should also know that there is wear and tear coverage on most extended warranties as well. Ensuring that a policy or extended auto warranty offers both types of coverage is the only way to make certain that a vehicle will not cost the owner additional repair expenses.
Another issue that many consumers remain unaware of when deciding to buy an extended warranty is the lack of coverage for those vehicles with ABS brakes installed. Interestingly, many vehicles utilize this technology and any repairs are a bit more complex than a standard “brake job”. This means that a consumer who is not informed of this gap in their warranty coverage might have to pay a hefty fee to get work done on one of the more frequently used systems in the car.
Additionally, there are also many extended warranty companies that do not provide coverage on damages resulting from overheating. The car or truck can experience an overheating event of any kind and for any reason, and the warranty will not pay for the repair.
Finally, many consumers who keep their car for a longer period of time are also likely to sell their vehicle rather than trade it in for a new one. For this reason, an extended warranty should be transferable to the next owner. Not all companies extend such options, but it can add dramatically to the resale value of a used car.