Will Your Extended Auto Warranty Cover Your Situation?

07/07/2018

When purchasing an extended auto warranty, your coverage can be confusing if you do not take the time to research it properly. Coverage types can vary depending on your warranty, and you do not want to assume that something is covered when, in fact, it is not. Then, you may wind up stuck at a repair shop wondering how you are going to pay for the expensive repairs that are needed.

The first type is the "breakdown" warranty. This is not the most ideal warranty to have, but it is an option for you. This type of auto warranty covers parts that break on your automobile. The reason this is not necessarily the best type of coverage is that not all car parts stop working due to breakage. In most cases, parts break down because they are simply worn down from extended use. In this situation, a "wear and tear" extended auto warranty is ideal. If your brakes wear down from normal use, the "wear and tear" auto warranty may cover the replacement of them.

An important warning, however: you likely will not find an extended auto warranty that covers overheating. If you have a car with a history of radiator problems, the warranty may not be your best bet. Most overheating problems simply will not be covered. If you have an extended auto warranty and your car overheats, causing damage, you may be stuck paying the bill out of pocket.

Every extended warranty may look the same to you, but it is important to fully research your options and ensure that you understand every scenario that your warranty covers. This can make the difference between a devastating repair bill and a quick visit to the repair shop.

You and your family decide to take a little road trip. You are driving down the road in a different state, when suddenly; your transmission goes out without warning. You breathe a sigh of relief because you purchased an extended auto warranty on your vehicle. You manage to get your car to a repair shop, and you find out that your warranty will not cover repairs made at this shop. Now you are stuck with a very hefty repair bill, despite paying the premiums on your extended warranty for months. Were you ripped off?

Not at all. It just means you did not look closely at the terms of your extended auto warranty. Some warranties will cover repairs made at any repair shop. These are the most preferable types of warranties. However, not all warranties are created equal. In fact, some require that all repairs are done at the dealership where the extended auto warranty was purchased. If this is the case, you may have purchased the wrong warranty, especially if you were hoping for out of town repairs to be covered.

Another situation: your car breaks down out of town, and you do not panic because your extended auto warranty covers out of town repairs. But when it comes time to pay the mechanic, you find out that you are responsible for paying the bill upfront. In this case, you then submit the receipt to the warranty company and then you are reimbursed, often weeks later. Not knowing this, you do not have the money to cover the repairs, and you are stuck. If you are not prepared for this, you need to make sure that your warranty covers repairs with a credit card - directly. That way, you are not going to be forced to pay upfront for expensive repairs.