•  Fully read the contract being offered to you. If the car warranty company doesn’t let you do that, don’t buy from them, it’s probably a scam.

•  Compare the different coverages that you’re being offered. Immediately exclude plans with terms and coverage that does not meet your needs, regardless of price.

•  Ask what the validation period is. Meaning, the term before which the plan cannot be used. If the answer is that “there is none,” and your car was not inspected, it’s probably a scam.

•  Don’t pay anything additional for using a payment plan. It’s a genuine rip-off to pay more. 

•  If a company didn’t pay to join the BBB, that doesn’t mean it’s a scam. But if a company does belong to the BBB, and has an F rating, it may just be a scam. 

•  Make sure that the auto warranty’s terms are what they seem to be: That the term starts from the date of enrollment, not the in-service date of the vehicle. 

•  Make sure you ask whether any discounts are available. Many companies have unpublicized promotions for military, senior citizen, or student, that are available for the asking.

•  Don’t buy an extended warranty that is more than $500 higher than any others that you’ve looked at. In such cases, either it has more coverage than you need, is simply overpriced or worse, is a rip-off.

•  Ensure that the company offers a 30-day review period after enrollment. If a company doesn’t have it, it’s very likely a scam.

•  If a company offers coverage on a reconstructed or salvaged title, it’s best to leave them alone. Reputable companies exclude those vehicles from coverage. Quality extended warranties that cover them don’t exist. Ones that do are scams.

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•  Direct payment to the repair facility. If you’ve taken the trouble to get an extended warranty, why should you still have to fork over the hundreds or thousands of dollars for the repair? You shouldn’t. Most auto warranty companies will pay the repair for you, directly over the phone by credit card, to your repair shop. Don’t settle for a reimbursement-only company. 

• Directly insured by an independent, AM-Best rated insurance company. What happens if your car warranty company goes bust? You lose everything, right? Wrong, but only if your warranty company was directly insured by a solid insurance company. AM Best is the independent, respected evaluator of insurance company, with grades ranging from A to F. Make sure that your extended warranty company is protected by at least a B-rated insurance company. 

• Wear and tear coverage. That doesn’t mean the plan will cover brake pads, tune-ups, or chipped paint. But, that does mean that a part or component doesn’t have to completely fail or break in order to be a covered repair. Many car warranties require a complete failure of a part before they’ll pay for the fix. But for plans with wear and tear coverage, if a part isn’t working the way it’s supposed to from the factory, it’s consider broken, and will be approved. Make sure your plan has it. 

• Towing and rental benefits. Car broken down on the side of the road? And/or need a rental? A quality extended warranty will include provisions for reimbursement of a portion of rental and towing expenses. No need to settle for one that doesn’t.  

• Low or no deductible. Once you’ve paid good money for your auto warranty, you really shouldn’t be paying too much out of pocket for a covered repair. It’s standard for warranties to have a $100 deductible, but if there’s an option for a $0 deductible, that’s a better choice. If the deductible is higher than $200, don’t bother. 

Brokers such as AA Auto Protection have plans available with these Five Fabulous Features. Taking the time to learn about the benefits of your plan can help you get the most out of it.

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