When you purchase a new vehicle, you need to consider both which make and model you are interested in, as well as whether you need to purchase an extended car warranty insurance or not.
You will obviously be doing a fair bit of research into the various cars and the benefits they come with. In this vein, it is important to note that all new cars come with a standard manufacturer’s warranty as part of the basic package.
Depending on how long you plan to keep your new vehicle for, you will have to decide whether to take out an extended warranty insurance policy or not. In a nutshell, an extended warranty covers a percentage, or all, of the cost to repair your car if any components fail once the standard manufacturer’s warranty has expired. It is crucial to take into consideration that not all extended car warranty insurances offer the same benefits.
Even though the insurance industry in Australia is heavily regulated, with most insurance companies offering reputable products, there are a few unscrupulous companies who offer new car warranty insurance scams to unsuspecting buyers.
The following 5 tips will help you avoid being caught in a new car warranty insurance scam:
1.Not all extended car warranty insurance policies offer the same levels of cover
The truth is that most extended warranties offer limited cover on certain car parts. When investigating which warranty will best suit your needs, make sure that you are cognisant of which parts are covered, how long they are covered for, and under what conditions they are covered.
2.How transparent is the insurance policy?
Most extended warranties are very clear on what they cover. However, there is always the possibility that a scam has managed to slip through the heavily regulated industry. Read the fine print at the bottom of the insurance policy document to see what the policy covers.
If the fine print appears very convoluted and difficult to understand, walk away from it; rather be safe than sorry.
3.Focus on what is not covered
If the list of not covered items is longer than the covered items list, then you should be concerned about validity of this policy. If the extended warranty has a high level of exclusions and lots of fine print, it is usually designed to benefit the insurer and not the insured.
4.Ask questions about the extended warranty
Talk to a couple of reputable car repair dealers and ask them if they have ever dealt the insurance companies in question. If so, ask them how easy it is to submit claims and receive payments from these insurance companies. Also check whether you can take your car to any repair shop if you take out the specified extended warranty.
5.Check online review websites and forums
Most people are quick to comment online about the service they have received from a particular company. Check online review sites such as Whirlpool to see what reviews are available. You will be able to pick up whether a particular extended warranty plan is a scam or whether it is worth considering.
The extended warranty insurance world can be a minefield of misinformation. Use the above tips to carefully navigate your way around finding a warranty plan that suits your needs.