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5 Questions to Ask When Considering Extended Warranty Insurance  

by | Jun 26, 2015 | Car Insurance Blog

At the end of the day, Extended Warranties are simply insurance policies. Like all insurances, you may grumble and cringe a bit when you look at the premium, but that is nothing compared to the pain of paying out of your pocket when something goes wrong.  We can’t predict if our car is going to have an expensive failure (or worse – MORE than one)  – But you can give yourself the peace of mind that you will be covered when it does go wrong. Here are a few questions you can ask to make sure you get the right cover and real peace of mind.

1. How Long Will You Be Keeping the Car?

Do you change cars more often than you change razor blades? That’s an extreme example. but if you tend to trade in your car every 2 or 3 years and don’t put excessive kilometres on it, an extended warranty probably isn’t worth it—especially if you are buying new each time. New cars come with manufacturers’ warranties that last anywhere from 3 to 10 years and 50,000 all the way up to unlimited kilometres for some models. On the other hand, If you plan to keep your new car for a while or are buying a used car, an extended warranty could be worth it to you. When buying a new car, make sure to find out what kind of warranty it has. And if buying used, ask whether it’s still under Manufacturers New Car Warranty and if so, how much of the warranty is left.

extended car warranty, used car warranty, new car warranty

If you plan to keep your new car for a while or are buying a used car, an extended warranty could be worth it to you.

2. What Does the Warranty Cover?

It’s important to know what repairs are and aren’t covered before you buy a used or new car extended warranty. Talk to the insurance agent and read through the policy carefully to see what’s covered and what the limitations of the policy are. A good policy will clearly and plainly identify “What is NOT Covered”.  Along those same lines, the insurance company will also likely offer different levels of cover so you can find the one that’s the best fit for your needs and budget.

3. What Is the Vehicle’s Reliability Rating?

Some vehicle brands are more reliable than others. Whether you have a good idea of a brand’s reliability from personal experience, the experiences of friends or family, or from online reviews, that information can help you determine how likely it is that the car will need repairs down the road. If you choose to buy a car known for its reliability, you may feel OK about foregoing an extended warranty. However, keep in mind that even if you buy a car that has the highest reliability rating, there’s no guarantee that it won’t have issues – even a simple electronic control unit failure can cost thousands.

4. Can You Get the Car Repaired at Any Shop?

Another thing to think about when considering an extended warranty is whether the repair shops close to you are approved by your warranty provider. Be aware that some Extended Warranty products only allow you to have repairs done by the Dealer that issued the policy. Maybe you have a mechanic you trust with all your repairs, but they aren’t in your insurance provider’s network of repair shops. Ask the provider if they work with your repair shop if not being able to use a particular shop is a deal-breaker for you. Better yet, choose an insurer that allows you to go to any licensed mechanical shop. We offer this benefit with our extended warranty insurance, and all the repairs come with a guarantee as well. Benefits like these can certainly make buying a new or used car extended warranty more appealing.

5. Are You Getting the Best Price and Cover?

Don’t choose your policy based solely on cost – It really is true you get what you pay for, so if someone is ‘throwing in’ an Extended Warranty for nothing, be cautions about what you are actually getting. It’s important to shop around to make sure you’re getting the best price for the insurance cover you want. Along with a good rate, some other things to consider are; what is their claim payout track record is, are there any claims limits or ‘caps’, what is the excess (if any), and whether it’s a per visit or per repair excess, and what additional options and features they offer with their policies. The more information you have about the insurance company and the policy, the better you’ll be able to decide if an extended warranty is right for you.

In our experience, the best protection and cover is offered by well known reputable Insurance Companies.

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