5 Tips on Extended Vehicle Warranty Myths and Misunderstandings

Myths and misunderstandings are wide-spread about vehicle extended warranty purchase. Often you will be advised against purchasing this insurance. However, when buying a new car, the dealer will always push sales of extended warranty contracts. Dealers include the extended warranties in your sales contract which will increase their revenue.

Contrary to information you have heard, you may purchase extended warranty outside of your car dealership. Ask to see the actual contract so you understand the coverage. Is coverage for mechanical breakdown or for actual wear and tear? Cheaper policies often do not grant the coverage you are expecting.

The following tips concerning 5 myths/misunderstandings of extended warranty vehicle coverage can be helpful to your budget and decision making.

1. Extended warranty vehicle coverage may only be serviced at your dealer.
A professional business can service your vehicle. Keep all receipts and have service provider complete records as needed for any future information.

2. Continued and scheduled vehicle maintenance serves only as a money-maker for the auto business.
Regular maintenance schedules must be followed for the warranty to be honored. By neglecting small maintenance needs, you could be paying large repair bills plus buying warranty coverage. Why is that? Because the warranty company may not cover expenses. If they find problems caused from careless neglect of maintenance and record-keeping, your coverage is invalid.

3. Buying extended coverage for new vehicle gives you double coverage.
The newer your vehicle the less cost for extended vehicle coverage. Coverage begins when old warranty expires.

4. Rental car allowance gives you the same vehicle as your own.
Rental car allowance most likely will not be for the same type of auto you own. You will have reliable transportation and could pay out of pocket for a larger or more equipped rented vehicle.

5. There will be no charge to you for towing.
Some policies allow a dedicated amount for towing services. You would be charged for any additional costs above that allotted amount.

Personally, I've always purchased an extended warranty for my vehicles. Each time the warranty has more than paid for itself. You must stay on top of issues and ask questions. A good extended warranty could also help you sell your older vehicle.