They’ve been trying to reach you about your warranty…
Here’s what to say when they find you.
Big Warranty has dispatched armies of agents to insure each of us knows the amazing possibilities of Extended Warranties. They’re everywhere, pouncing from the shadows when you least expect it. If you’re one of the seven people in the US that hasn’t heard from them yet then sit back, because it’s just a matter of time. But if you read this article now you’ll know exactly what to say when they finally catch up with you…
This article started out to be about Extended Warranties, but quickly became about automotive ignorance, a false stereotype, and the importance of calling the Tom Dwyer Service Advisors when you have a question.
Charles, our Outreach Advisor and frequent newsletter contributor, is the only person in our shop who knows nothing about cars. He’s also suffered through the robo-calls from the Warranty Police and thought an article about Extended Warranties would be useful. Being automotively ignorant, he stereotypically assumed any product or service depending on so much on telemarketing could only be a scam. However, when he actually talked with our Service Advisors for this article he found the story was much more complicated.
“They’re kind of a mixed bag”, said Kyle. “Sometimes they pay up with no problem, but I’ve also spent a lot of time with Warranty reps trying to deny claims.” Dean had a different take. “I always recommend clients get an extended warranty, especially with today’s repair prices!”
No one backed up Charles’ uneducated assumption that Extended Warranties were only scams.
An Extended Warranty is repair coverage that starts after your original new car warranty ends. It’s not really a warranty (which covers the full cost of any breakdowns) but more like insurance because you pay premiums, you pay a deductible, and the policy pays all or part of some claims. Most are after-sale policies offered by third-party companies, but Manufacturers and Dealers offer them as well. Prices vary depending on vehicle, coverage level, and other factors, but you might expect to pay about $2000-$4000 for around 100,000 miles of coverage.
Kyle’s advice was a slightly cynical, but realistic. “A warranty is only as good as the company that puts it out. I’ve dealt with some good companies, but a lot of time they’ll only want to pay part of the repair, or use sub-standard parts, or I’ll have to fight with the company to get the repair covered at all.” Those are problems for most types of warranties or insurance, but things are much worse if the company itself goes under. “No one is back-stopping them if they fail, meaning if the company ends then your Warranty ends whether you paid in full or not.”
Dean’s advice was more positive. “It only take
s one big electronic repair, or a transmission, or any big repair these days, and the warranty has paid for itself.” He speaks from personal experience with his family. “I made… made… my daughter buy an Extended Warranty when she bought her BMW. Just a couple months after she got the car, she brought it in for an oil change and we found coolant in the oil. Now that Extended Warranty is paying for her new head gaskets, which is a $4000-$6000 repair on a BMW!”
The best candidates for Extended Warranties are people with expensive vehicles with lots of expensive extras. If you plan to change vehicles as soon as (or a year or two after) your warranty expires then you probably won’t get the extra value from the extra protection. If you plan to “drive it until the wheels fall off” then the extra protection makes much more sense.
If you think an Extended Warranty is for you, here’s some guidance to do it right…
- Don’t respond to the telemarketers. Contact a company directly and talk with them. The best 8 companies, according to WalletHub, are Carchex, autopom!, Endurance, Toco Warranty, Omega Auto Care, Infinite Auto Protection, Concord Auto Protect, and CarShield.
- Know the basics of the full cost, monthly payments, deductible, and warranty period (either by time or mileage)
- Know what the warranty covers, and what it doesn’t. A bumper-to-bumper warranty should cover powertrain, electronics, and other critical vehicle systems, but what about, for example, tires? Drivers with expensive wheels and low-profile tires may want coverage for them, but it may not be covered in a base plan.
- Know the restrictions on where you can and can’t have the vehicle serviced.
In general we think if you just drive normally, find a shop you trust, put aside $200-a-month or so for repairs (which is in the ballpark of an Extended Warranty premium), and follow the shop’s recommendations for maintenance and repair, you’ll have a fundamentally reliable vehicle and have money put aside for the inevitable large repair. In the long run, we think this is a prudent path for most people. And if you have further questions, learn from Charles… don’t make assumptions; CALL AND ASK OUR SERVICE ADVISORS. Their answers may surprise you, too!
Digging Deeper…
How Much Does An Extended Car Warranty Cost? Motor1.com, Mar 2020
How to Shop for an Extended Car Warranty, Benjamin Preston at Consumer Reports, Jun 2020
How Much Does an Extended Car Warranty Cost?, Jessica Campbell, Endurance,
What is the Average Cost of an Extended Car Warranty?, Alex Perrone at Endurance
Best Extended Car Warranties, WalletHub
What to Know About Extended Car Warranties — and Why They’re Rarely Worth It, Kim Porter in NextAdvisor, Jun 2021
An extended car warranty: Is it worth it? Jennifer Brozic on Credit Karma, Jun 2021
Should You Get an Extended Warranty for Your Car? Jeff Bartlett on Consumer Reports, Mar 2021
Understanding Extended Warranties: Finding Coverage That’s Right for You, Matt Jones in Edmunds, Aug 2017
Extended Auto Warranties: 5 Questions to Ask Before You Say ‘Yes’, Ronald Montoya in Edmunds, Nov 2019
