Extended Warranties for Automobiles Guard Against High Labor Rates
 Sometimes called an "extended warranty", a service contract is a promise to perform (or pay for) certain repairs or services. Although technically not a “warranty” as defined by federal law, service contracts may be arranged at any time and always costs extra. Warranties, on the other hand, ONLY come with a new car and are included in the original price. Vehicle service contracts are popularly referred to as "extended auto warranties" or "extended warranties". Use of the term "extended warranty" or "warranty" on this site is intended to refer to vehicle service contracts and not manufacturer's warranties.
In many cases, the majority of the expense of a vehicle repair is not the broken part, but the labor cost to fix or replace the part. Repair shops’ labor rates have soared over the last decade, to nearly $100 per hour nationwide. A good car warranty helps drivers contain the rising costs of vehicle operation and repair.
The average labor rate at local shops is between $50-$80 per hour. But most Americans return to their dealer for service, where the labor rate averages $80-$100 per hour. In major cities such as New York, Chicago, and Los Angeles, high-end dealers are at the $125 per hour mark. That means that practically any vehicle repair, including even the most basic part, will cost at least $250. These days, that’s money that struggling households can use elsewhere.
To protect against the surging labor rates and repair costs, drivers should consider investing in a car warranty. Brokers such as AA Auto Protection specialize in finding comprehensive, affordable auto warranties. A quality extended warranty will pay for parts, labor, and taxes. With those costs avoided, drivers can make sure that mechanics’ livelihoods do not take away from their own.
7/11/2010 11:57:32 AM
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