Auto Warranty Plans - Who Has the Best Auto Warranties

March 8, 2012

Learn about the top 7 auto warranty companies, the typical terms of extended auto warranties, and how they differ from manufacturer warranties.

While there are many auto warranties to choose from, there are few that can be trusted. Finding the right company can be daunting. Fly-by-night companies are everywhere, even calling you at home about cars you do not own. This article will take a look at some of the top auto warranty companies, so you can make an informed choice about your auto warranty plan.

The Auto Warranty Agency
The Auto Warranty Agency has all of the top providers in one place. They offer a website that will instantly show you a quote for all of the plans and companies available to you. This company offers plans to suite any vehicle, including commercial and high mileage vehicles. You can also view the contract online. They are "A" rated by the Better Business Bureau and by AM Best.

American Auto Shield
American Auto Shield offers a large number of coverage plans including bumper to bumper, extended auto warranty, manufacturer's warranty and mileage warranty. American Auto Shield pays the shop directly, and also allows you to use the shop of your choice, although they do require that you contact them prior to any work being done. This company covers both new and used vehicles, and has an "A" rating from AM Best and the Better Business Bureau.

Gold Key
Gold Key has been in business for more than 30 years. They have a full range of service plans as well as quick claims service and payment reputation. The contracts used by Gold Key are on their website, and are printable for you to look over before you purchase from them. They have a "B" rating with the Better Business Bureau.

NAC, also known as National Auto Care, is the company preferred by most dealerships. NAC does not cover vehicles older than 10 years, but they do cover motorcycles and ATV's. They have been in business for over 25 years and have an "A" rating with AM Best and a "B" rating with the Better Business Bureau.

Alpha Warranty Services
Alpha Warranty Services offers a full range of coverage, however to get complete coverage you need to add options for extra cost. This company is rated "A" by the BBB and "B" by AM Best. They have been in business for three years.

Administration Plus
Also in business for three years, Administration Plus offers very good plans. However, they do not include wear and tear coverage. Wear and tear coverage is highly recommended. Administration Plus has an "A" rating from the BBB and a "B" rating from AM Best.

Nations Warranty
Nations Warranty offers comprehensive coverage to suit all of your service plan needs. From high mileage older cars to the brand new ones, with Nations warranty you are covered. They have trip interruption, any mechanic of your choice and low deductibles with coverage for three years and 36,000 additional miles. So if your vehicle already has 100,000 miles on it, you will be covered to 136,000. Also, all of their warranties are transferable.

What's Considered Normal Wear and Tear?

Because maintenance is always a consideration and can add up to major expenses, it's good to know what normal wear and tear is. This knowledge can help you decide whether or not to purchase the vehicle you are thinking about.

Wear and Tear Items
A general rule-of-thumb: under a new car warranty, everything will be covered, including lights, brakes, engine parts, battery, suspension, interior appointments and transmission. The exceptions are oil, tires, body parts (in case of an accident) and brakes. Normally, you will not wear out any of the major components of your vehicle including tires, brakes or engine parts in the first three years of ownership. So unless you drive your car especially hard and as a result, wear out the tires or brakes, you are going to be responsible for basically oil changes and gasoline for the first three years.

Normal wear and tear does not include neglect; for example, if you allowed your dog to tear up your car's interior. Nor does it include deliberate damage; for instance, if someone becomes angry with you and deliberately drives your car into a tree.

Used Car Warranties
Used car warranties are vastly different from new car warranties, and cover a lot less. When you purchase a used car, you can expect to be covered for about 30 days. Usually this includes lights, battery, tires, engine parts, body parts - anything that might go wrong and make you unhappy with your purchase. A word of caution: used car warranties vary widely, from city to city, from dealership to dealership and from car to car. Make it a point to find out exactly what is covered under your used car warranty and for how long. And get it in writing.

Extended Auto Warranties
Extended auto warranties are another field entirely. These warranties are designed to cover items that may give you problems and cost you a lot of money. Extended warranty payments are often added to your monthly car payments, or you can pay them in full at the time of purchase. Extended warranties vary considerably from company to company and can be confusing when it comes to normal wear and tear items. Ask questions, get answers in writing and make it a point to be certain about what exactly is covered under an extended warranty.

How an Aftermarket Car Warranty is Different from Other Common Warranties

When you purchase an extended warranty on a vehicle, you may be offered a manufacturer backed warranty or an aftermarket car warranty. Before you purchase extended coverage, you should understand the various warranty options available to you.

Aftermarket Warranties
Aftermarket warranties are usually provided by a private warranty company other than the car manufacturer. Aftermarket warranties are available on new cars and many used vehicles. They usually involve some sort of service or warranty contract that specifies what is and what is not covered under the terms of the agreement.

Aftermarket warranties offer protection and service commensurate with the amount paid for the warranty. For example, a bumper-to-bumper aftermarket warranty may cost up to $2,000 or $3,000. On the other hand, a very basic aftermarket warranty may only cost several hundred dollars, but will only cover a few types of major repairs.

Manufacturer Warranties
A manufacturer warranty is exactly what the name implies: a warranty provided by the manufacturer of the vehicle. In most cases, a manufacturer's warranty is only available for new cars or vehicles that have been certified under the manufacturer's certified pre-owned or certified used vehicle program.

In most cases, a car manufacturer's warranty covers almost all parts and repairs for a qualified vehicle. Repairs and service for warranty work is usually provided by a factory trained mechanic or technician at a local authorized dealership.

Mechanical Breakdown Coverage Policies
More and more standard car insurance companies are offering mechanical breakdown insurance policies to their insured drivers. This type of coverage is usually an add-on or rider policy and must be purchased in connection with a regular car insurance policy. At present, there are no known companies that provide this type of coverage as a standalone insurance product.

Mechanical breakdown insurance works in a similar fashion to an extended warranty contract, but usually involves making small incremental payments in addition to your regular monthly car insurance payment. Although this type of coverage may be convenient in terms of the amount of money required up front, a mechanical breakdown policy also usually involves a deductible requirement.

Dealer Service Contracts
Although not as common a practice as it was in years past, some dealerships still offer dealer service contracts. A dealer service contract is similar to a car warranty, however the agreement is usually only honored by the dealership that sells the car and service contract to the consumer.

Dealer service contracts can be very restrictive on the types of parts and repairs they cover. This type of warranty coverage is usually frowned upon. If the dealer goes out of business, then the dealer service contract is no longer valid or useful.

Warranties Required by Law
Many states require that all car dealers offer some sort of limited warranty on a vehicle at the time of sale. Depending upon the state you live in, a vehicle will be covered under a lawfully required warranty for a period ranging between 30 and 90 days. You should always check with your state's Attorney General to find out what type of car warranty protection is provided to you under the law.

Is an Aftermarket Auto Warranty Worth the Price

Many car dealerships will try to sell you an aftermarket warranty because it's a great way for them to make some extra money. It's important however to think about whether you really need these warranties or if they'll be of use to you.

Limited Auto Warranty
Limited warranties are often offered as standard with the purchase of a new vehicle. These will typically last for a period of seven years or 50,000 miles. They will cover the cost of putting anything right that goes wrong with your car as a result from manufacturing errors.

A limited auto warranty is not the same as an extended aftermarket warranty. Aftermarket warranties can normally be purchased from a wide variety of different companies, including dealers and companies on the Internet.

Is an Aftermarket Warranty Really Worth It?
Unfortunately there's no definitive answer. Whether or not the warranty is worth it will depend on your own preferences.

If you don't mind chancing it, then it's possible to do without an aftermarket warranty. However, as most people are looking for a way of limiting their risk, they will be interested in taking out these warranties.

Estimate the average maintenance costs on your vehicle. This will help you to decide whether or not the insurance will pay for itself. You will probably end up paying more for the insurance than it will save you, however it is providing you with the peace of mind knowing you won't need to pay for any repairs.

When deciding whether an aftermarket warranty is worth it, you must spend time thinking about what's actually included. Not all warranties are the same and this is something that you will need to bear in mind.

Finding Aftermarket Warranties
Some car owners may struggle to find aftermarket warranties depending on the model of car they have. Owners of performance, specialist cars and imported vehicles will struggle to find aftermarket warranties at a reasonable cost.

The reason for the increased cost and difficulty in finding these policies is due to the increased cost of putting these cars right. On some sports cars for example, the engine could end up costing $20,000 or more.

How to Purchase an Aftermarket Auto Warranty

An aftermarket auto warranty can be a very expensive purchase, so it's important to spend time carefully choosing the right policy. There are a number of different things you need to consider. Choosing the very best aftermarket auto warranties will help you to get the best level of cover for the lowest possible price.

There are lots of different aftermarket warranty companies that you need to compare so to ensure you're getting the very best deal. Many of these can be purchased on the Internet without even needing to leave your home. As soon as you've completed the deal, your car will be covered instantly. This makes getting an insurance policy very simple.

Your car is very expensive, and it's worth looking after by taking out an aftermarket warranty. These warranties will help you to ensure that you are fully protected without needing to worry about any unexpected repair costs.

Think about the Coverage
First, you need to spend time thinking about the level of coverage you require for your car. Most people prefer a comprehensive plan, which provides for everything on your car. These are known as bumper to bumper policies, and will be the most expensive option.

There are other types of policy which specialize in certain parts of the car. These could protect the engine, transmission and various other expensive systems inside of your vehicle. If these go wrong, you could end up with a huge repair bill without an aftermarket warranty.

Talk to Your Credit Union
It's a good idea to talk to your credit union to find out whether they supply aftermarket car warranties. Purchasing from a credit union can be a very reliable and secure method of purchasing a reliable auto warranty.

Contact Dealerships
Talk to mechanics and dealerships to find a reliable auto warranty company. There are lots of dealerships which have preferred warranty companies they like to work with. You will improve your chances of getting a good warranty if the garage in question has already had experience working with them.

Check Credibility
Get the phone number and address of the company you are working with. Use this information to ensure that the company is genuine and not going to do you out of any of your hard earned money. Find out how long the warranty company has been working. It's safer to choose companies which have a longer history, as these are less likely to fail.

If companies advertise over the phone, by email or through the mail, you should be suspicious. Many of these end up being nothing more than scams and are best avoided.

Comply with the Warranty Company
It's likely that the warranty company will want to inspect your car. If they do, you have no choice but comply. They only want to look at the car and find out whether or not it has any existing problems.

Best Extended Car Warranties: What to Look For

Who Backs the Warranty?
This is probably one of the most important things to check into when looking at extended warranties. If the warranty is sold and backed by the manufacturer of the vehicle, you are purchasing the gold standard of extended warranties. It should be easy and convenient to have the vehicle serviced, and there will be plenty of locations to choose from. The strength of these warranties depends on the long term prospects of the company backing them, so carefully check them out. When purchasing the best extended warranty, it is important to know who is paying for your coverage if you have a breakdown.

There are two types of companies that will back a vehicle warranty, the manufacturer of the vehicle or an independent insurance company. While the manufacturer's coverage may be the easiest to get, it is also usually the more expensive. With the independent company, you will need to check the credentials of the underwriter. There are plenty of fly-by-night warranty companies that will take your money and never pay for a repair. Check the company against AM Best, a ratings company for insurance. Try to choose a company that has at least an "A" rating.

Who Handles Claims?
Ideally you want to deal with the company that sold the warranty. Buying from third party vendors means you have to contact a separate company any time you need to make a claim.

Carefully read the warranty. There will often be a list of items or problems that are excluded from coverage. Check this list carefully, as it is best to have the fewest exclusions possible. You don't want to have a major breakdown and then find out the parts are on the excluded list. Most car warranties do not offer overheating policies, so if your radiator develops a leak and your engine is damaged due to overheating, you will have to cover the repair yourself. Make sure your policy covers your ABS brakes if you have them, as most policies have ABS brakes as an option. The best extended car warranties will allow you to choose options that will cover these things and even normal wear and tear.

Make sure labor charges are included in your warranty. There are some warranties that do not include labor charges. These charges can add up, so verify they are covered.

Repair Locations
Verify how many locations are available for repair. There are some warranties that require you to bring the car back to the dealership or to a small number of approved repair shops. This can be a real hassle if you are out of town at the time of breakdown. A manufacturer warranty allows you to go to any of their dealerships for repair, so you are never that far from an approved location. When looking for a warranty, select one that will allow you to choose your own repair shop. This is much more convenient than going to a certain shop if your car breaks down.

Are claims paid directly or are you expected to make payment and submit paperwork for reimbursement? This is an important consideration, as often it can take weeks to get your money back. A warranty that pays the repair shop directly is best.

Warranties often have a deductible, so check the deductible amount. A large deductible lowers the price of the warranty, but means you will have higher out of pocket expenses when a repair is necessary.

A $0 deductible is highly recommended. If you can get one, the extra charge will pay for itself very quickly. There are two kinds of deductibles with most warranties: the flat rate and per repair. The flat rate charges one fee when you go to the mechanic while the per repair rate charges the full deductible for every repair done. If you regularly have more than one repair done at a time this can add up very quickly.

Transferable Warranties
Is the warranty transferable, is a question you should always ask. It can be a big selling point if you decide to sell the car and the warranty goes with it.

Bumper to Bumper vs. Basic Car Warranties

While there are certainly many types and variations of extended car warranty plans and policies, extended warranty coverage usually comes in one of two forms: bumper-to-bumper coverage or basic systems only coverage.

Bumper to bumper warranty coverage is the common name for an expensive extended car warranty which covers almost all parts and systems in a vehicle. In most cases, a bumper to bumper warranty covers the cost for parts and repairs for the engine, drive train, transmission and other major subsystems or accessories in the vehicle. However, this type of coverage can be very costly and is not available for all vehicles. Generally speaking, bumper-to-bumper coverage is usually only available for new vehicles or used vehicles less than a few years old.

A basic extended car warranty is much less costly than a bumper-to-bumper plan or policy. However, unlike a bumper-to-bumper warranty plan, basic warranty coverage will usually only cover the engine, drive train and transmission of the vehicle. If repairs for other subsystems, accessories of the vehicle are required, the consumer must usually pay for these costs out-of-pocket. A very basic extended car warranty is usually a good choice for consumers that are willing to pay for minor repairs themselves and use warranty coverage for the most expensive repairs.

Special Considerations for Old Vehicles
Before you purchase extended car warranty coverage for a very old vehicle, you may want to consider that coverage for the warranty plan may cost more in the long run than the vehicle is actually worth. For example, if you purchase a $500 or $1000 warranty contract plan for a vehicle that is only worth $1000 or $2000 at the time of purchase, is probably much more prudent to simply pay for repairs as they made be needed.

Also, you should be aware that while extended warranty coverage is available for some older vehicles, warranty contracts for these vehicles will usually have the anticipated cost of major repairs already built in. This means that the cost of the warranty contract is priced to offset the cost of a major repair that the warranty contract may cover.

In short, with these types of warranty contracts, you are simply paying for the cost of an anticipated major repair upfront. You can probably find much better uses for the money or simply earn interest on it in a savings account and pay for the repair at the time it is performed.

As with any contract, be sure to read car warranty info carefully and ask questions about anything you don't understand. An extended warranty can be a real life saver when an expensive repair pops up. Carefully research all of your options before making a commitment.

Auto Warranty Scam: 4 Telltale Terms

People are all too aware of the problems caused by an auto warranty scam, and are often skeptical when it comes to taking out an extended auto warranty. There are however, a number of different terms you really need to look out for to minimize the chances of falling prey to one of these unscrupulous dealers.

First off it's a good idea to ignore anyone who phones up. Telemarketing is almost always going to con you and leave you with no coverage at all. Another way to find out whether an extended warranty company is genuine is to search the Internet for any complaints. These complaints are a sure sign that something is not quite right.

The first thing that you should do is read through the fine print of the auto warranty to discover which company is responsible for the payment in the event of a claim. It's a common sign of a scam if you are asked to pay the repair bill up front and then receive reimbursement later. All credible auto repair warranties should work with partner garages and you shouldn't have to pay anything to repair the car. The garage should receive the total payment from the warranty company at the time of the repair.

If there are any policies which request you to pay in advance and then reclaim the money the chances of fraud are much greater. Getting the money after the event will be very difficult and you will have to jump through lots of hoops if you ever want to see your money again. This shouldn't be your problem, let the garage worry about chasing the warranty company for their money. Never accept policies which make you pay first.

Authorized Shops
In the policy document you should be able to find a list of local garages which are participating in this auto warranty program. Any fewer than this number and you are asking for trouble. It's also a good idea to visit each of these garages in person so that you can find out that they do offer the cover and also that they can do the repairs in question. It's important to only deal with warranty companies which deal with recognized and licensed garages.

Complete Coverage
It's important to understand that an auto warranty business exists to make a profit and not to do you a favor. These companies are almost as bad as insurance companies and have lots of different clauses and limitations of cover. For example these policies will not cover general wear and tear, damage caused by accidents, or damage due to misuse or improper maintenance.

If you ever find a warranty policy which claims to be able to cover everything and there are no limitations then this sounds far too good to be true. This is a very common type of auto scam and you will have a hard time claiming for anything.

Pay for Contract
Certain car companies, including Chrysler, will only send you a copy of the auto warranty agreement after you have paid. This is because they don't want you to ask any questions. Never part with any money until you see the entire document and have asked all of the questions possible.

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