1. One customer stated that they purchased an extended warranty and never had to use it.
That's great, wonderful, I'm glad they didn't have to spend time hanging around a service garage and buming rides to work. But just because you didn't use it doesn't make it a waste of money. I'm sure many of you are saying "What? How could spending money on something you never use NOT be a waste?" Well, it's simple. I've been paying car insurance on my vehicle since I was sixteen years old and I've never been in a car accident. It doesn't mean that car insurance isn't a good idea, as a matter of fact it's illegal to drive a car without it. Added to that I don't consider my insurance agent to be a rotten cheat for selling it to me, even though I've never had a claim. Extended warranties are INSURANCE policies. They give you piece of mind.
2. The next complaint was spending money on an extended warranty and discovering that none of the repairs are covered.
This is true and this happens often. But like any product you're buying you have to make sure that you're getting a quality item. I see commercials on T.V. all the time from extended warranty companies promising hassle free claims and guaranteed coverage and YES many of them don't back up those promises, but that doesn't mean that all extended warranties are bad. I advise people to ask questions, and read all the information available before buying anything they're unfamilar with. My husband spent two months researching T.V. brands before picking the best one to suit our needs. And I know that most people before purchasing a vehicle will shop and compare to ensure their getting the best product for their money. Extended warranties are no different. I advise people to read through the contracts and pay attention to the deductibles offered. Pay special attention to "Disappearing Deductibles" Many extended warranties purchased from dealers offer this kind of deductible. If your policy has a disappearing $100.00 deductible it means that if you bring it back to the ORIGINAL selling dealer you pay $0.00, but if you're on the vacation, you move, or your dealer closes all of a sudden you're paying $100.00 for every service visit. Many people are not aware of this fact. Also pay attention to whether or not they pay things like diagnostic time, and what dealers or garages will accept this warranty. You'll discover that not all service garages are willing to accept your warranties and you may have a hard time finding someone to repair your vehicle. So you may ask, "What are my options?" Well, from my experience the best warranty available is the GM Protection Plan (GMPP) through GMAC. I have this warranty on my vehicle and also on my parent's vehicles. It's the only warranty I feel truly comfortable offering to my customers. Their Major Guard plan is very comprehensive and the warranty is good at ANY GM dealer throughout the U.S. and Canada. If you choose to get the $0.00 deductible, you never have to pay out for service regardless of where you take the vehicle. "What if you don't have a GM vehicle?" It doesn't matter GM protection plan covers most brands of vehicles and offers the same coverages. I can offer this warranty to my customers and know that they will receive the proper care they deserve. With GMPP you get brand name parts and not after market or used junk. Plus many of the GM parts come with a lifetime warranty. So after your extended warranty expires if your fuel pump goes again, the parts and labor are still covered! GMPP offers several plans with many different coverages all with prices and values tailored to suit each individual persons needs. I know that when a customer leaves my office with a GMPP warranty they'll be protected.
3. Another common suggestion is to wait until then end of your 3 year 36,000 mile warranty.
While most warranty companies will allow you purchase extended coverage before the factory warranty ends what most people don't realize is that the prices are based on the age and mileage of a vehicle. While waiting till the end of the factory warranty to purchase you could end up paying $500.00 to $1000.00 more for the same warranty offered to you at the time of sale. Added to that many people choose to wait too long and end up wanting a warranty a 1000 miles after the factory one has expired and usually when they discover there is a problem that is no longer covered. It's also more benefical to purchase at the time of sale when you can role the cost of the warranty into your loan. I don't know about some people, but I can't really afford $300.00, $500.00 or $900.00 surprise repair bills, but I can afford $20.00 extra a month. It all goes back to what I orginally said regarding extended warranties as insurance plans. I spend something like $30.00 a month on life insurance for my husband. Obviously I'm praying that I never have to use it, but in the event that something happens we're prepared.
4. Another common fear is what if I buy a five year warranty and I only keep the car for three years?
Well in most cases you can cancel or transfer the warranty and get a prorated amount back for the time you didn't use. Again you have to make sure you are buying your warranty from a reputable company that offers these alternatives.
I hope that I have been able to put to rest many misconceptions regarding extended warranties and offer some insight on the options available to many consumers today. I welcome questions and hopefully I will be able to answer any concerns that people may have regarding the auto industry and the purchase of vehicles and products offered at many dealers. I have had the very special opportunity of being able to work in the service, parts, sales, collision and finance departments at my dealership through the years. I am currently working as the finance manager at my local dealer and I am constantly thinking of new ways to improve the way we do things in order to offer the best service available to our customers. I encourage people to share stories and experiences they've had while visiting auto dealers and I would strongly appreciate any suggestions on how you think we could improve they way we do business. Thank you.
