The Price of Having a Car Warranty May be Lower Than the Cost of Not Having One
 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.
David Knowles considered an extended warranty for his automobile, a jet black 2003 Cadillac DHS. “I heard that Caddys can be really expensive to repair, so I looked at getting a car warranty” said Knowles. After contacting several extended warranty brokers, he decided that the plans were too expensive. “In retrospect, they weren’t,” he said with a forced laugh.
Recently, David let his son, Jamal, use his car to take his date to the prom. On the way home, the party for the teenagers ended early when the vehicle would not move forward, but would only move in reverse. A frantic call to his father resulted in a tow truck arriving an hour later.
The next day, David brought his prized vehicle to his trusted mechanic. Said Knowles, “I knew I would get an honest estimate and honest work, which is hard to find these days.” The problem, unsurprisingly, was the transmission. The surprise was the repair cost: $2711. “I was just speechless for a few minutes. Then the mechanic asked me whether I had an extended warranty. I just walked out and caught by breath.”
The one auto warranty that Knowles nearly purchased only 9 months before was $2100, and would have covered the engine, steering, braking system, drive axle assembly…and transmission, of his vehicle. “I turned them down, I said it was too pricey. I guess that decision cost me more than it saved me,” concluded Knowles.
Consumers who may be daunted by the prices of a quality extended car warranty should also consider the cost of not having one. With part prices for older vehicles rising, labor rate averages increasing, and income shrinking, repair bills take a bigger bite out of the budget than ever. Reputable brokers of auto warranties like AA Auto Protection are able to offer a variety of plans for all needs, and for all budgets. A relatively small investment, at the time of your choosing, is always better than a large expense coming when you least expect it.
7/11/2010 9:07:39 PM
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