Tuesday, August 16, 2022

Should I Buy Warranty On Used Car

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Types Of Extended Warranties

Should I Buy An Extended Warranty On Used Car?

When you buy an extended warranty, youre buying it either from the manufacturer or a third party. For instance, an extended warranty bought from Honda or Mazda will be from the manufacturer directly and can only be purchased at specific dealerships.

Otherwise, you can purchase an extended warranty from a third-party company that is not affiliated with the manufacturer or dealership. These can be applied to both new and used vehicle purchases. When dealing with third parties, however, its important to be diligent about who you deal with to ensure the company is legitimate and trustworthy before signing a contract with them.

Does your friend drive your car on occasion? Find out if your friend is covered under your insurance.

Questions To Ask When Shopping Around

Along with big-picture questions such as the level of vehicle protection you want and how much youre willing to pay, heres a short list of questions to ask during your search:

  • Is the used car warranty company known for reliable and fast customer service?
  • Does the company have high ratings from expert sources?
  • What are consumers saying in online reviews?
  • Can you file claims on the weekend?
  • How many years has the company been in business?
  • Do the customer service representatives seem more eager to make a sale than meet your needs?
  • Are warranty plans transferable?
  • Are there restrictions, limitations, or inconveniences outlined in the fine print of the providers contracts?

Where To Buy An Extended Warranty For A Used Car

In addition to the dealership where you purchase your used car, there are several companies that offer MBI or extended warranties. Remember, not all warranty companies are the same. Do your research prior to buying. Again, take a look at those terms and conditions so you know the ins and outs of each plan.

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What Is An Extended Warranty

An extended warranty is an insurance policy that covers your vehicle in case it is damaged or requires certain repairs that you may not have anticipated to happen so soon. While there are different warranty options, these extended warranties are designed to protect against surprise issues with your car for a certain period of time.

When you buy a new vehicle, it will come with a factory warranty that covers the first few years of the life of the vehicle, or the first few thousand kilometers of driving, whichever of the two comes first. This factory warranty will cover the cost of any repairs that are needed, as long as they are specified in the contract.

But the time frame for this coverage is limited, which is why some people choose to purchase extended warranties for their vehicles to make their coverage last longer.

Did you know that woman are offered different insurance rates? Learn more here.

How Do I Know If A Company Is Good Or The Best Car Extended Warranty Option

Should I Buy An Extended Warranty On A Used Car?

It is important to understand what makes a company legitimate remember, a company is only as good as its backing. California MBI regulations help to provide some framework, but you still have to make sure the company backing the plan is a large company that will not likely be going out of business in the next few years. For the rest of the US, choosing VSCs can be a risk unless you know they have a strong backing.

You rely on your MBI/VSC provider for peace of mind. If the MBI or VSC you choose is not financially sound, you may never get covered. Like any other insurance product you buy, you need to know they will be there when you need them.

Here at olive, every single policy, whether MBI or VSC, is backed by QBE, an insurer with $15 billion in global gross written premiums. Theyemploy over 12,000 people in 30+ countries and have been anunderwriter with a consistent A+ Financial Strength rating from A.M. Best, Standard & Poors, and Fitch Ratings.

Thats a lot of letters and numbers.

Bottom line: our customers plans are dependable, and that alone may make them one of the best extended car warranty solution options..

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Should I Buy An Extended Warranty

Youve spent hours, days, or maybe weeks researching, shopping, and negotiating for your next vehicle. Finally, youve picked out the right car, worked out a reasonable price, and pulled the trigger on a deal. It feels like all the big decisions have already been made as the salesperson shows you to the Finance and Insurance office and then the F& I manager drops another choice at your feet: Do you want to buy an extended warranty?

This question can be daunting if you havent planned for it, especially if youre worn down from the car-buying process. But doing some research beforehand will be a major help, just like it was when you were deciding which vehicle was right for you.

Are You Likely To Use The Coverage

Even if you have great extended car warranty coverage, the statistical likelihood that you’ll use it can’t be ignored.

Before you make a purchase, look closely at the systems and parts that are covered. Make sure you understand the deductible and claim rules, and do some math. If your warranty has a $200 deductible and it costs $2,500 over the course of two years, your car would probably have to break down multiple times and require expensive repairs for you to break even.

Even if your car required major repairs costing $600 four times over two years, you’d pay more for your coverage than you would have if you paid 100% of the repair bills out of pocket.

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Anything Else To Know

If youre thinking of picking up a bargain new car from overseas, be aware that manufacturers sometimes provide different warranties in different countries. Toyota, for example, provides a five-year warranty in England, but Irish customers must make do with three years cover. On the subject of travel, rest assured that should your car go wrong while on holiday, warranties are valid within the EU as long as you use an approved repairer.

If youve bought a new car, you have every right to expect the best possible service this should be reflected in any warranty claims you may need to make. Its likely youll face some disruption as the fault is being repaired, but many dealerships will collect your faulty car from your home and drop off a courtesy car at the same time, making the process as painless as possible. A warranty on a used car bought from a franchised dealer should be similarly hassle-free many have their own workshop, meaning one less point of contact to deal with.

Third-party warranties can be excellent, but youll probably be dealing with the company over the phone or email and this can be frustrating, particularly if a claim is disputed. If youre struggling to find an aftermarket warranty that provides a decent level of cover at a price you feel is reasonable, it can be easier and more cost-effective to simply set aside a certain amount of money each month in case things do go wrong.

Buying At The Dealership

Should You Purchase Used Car Warranty?

Many of us have experienced buying a car warranty at the dealership:After hours, days, weeks or even months of shopping, learning, and test driving, you finally find the car you want and you are ready to sign the papers so you can go for your first joy ride. But waittheres more!

At the dealer you can get 1-2 options for warranties. You might be able to roll it into the financing for your car, pay for it outright, or subscribe to for a 2-3+ year commitment. If youre well-informed, you can navigate your options and figure out what works best for you. Most people do not live and work in the car warranty world they have no idea how much something like this costs and have no way to compare it in the moment.

You dont need to feel pressured. You have time to find the best extended car warranty solution for your needs, and with web based tools like the one olive offers, you can do some research before you even go to the dealer-or right from your phone at the dealer.

In most states, you have 3 days to return a car after purchase if you dont like it. You should be able to get 2-3 days to make the decision on your car warranty. If not, then it might be a good idea to say no and look for something on your own.

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How Can A Vehicle Warranty Policy Be Invalidated

Making sure you meet the rules and requirements of your warranty policy is essential to avoid having claims declined.

Claims can be invalidated by:

  • continuing to use your vehicle even if a warning light appears on the dashboard
  • driving your vehicle even though theres a noticeable mechanical or electrical fault
  • not getting your vehicle serviced at the intervals recommended by the vehicles manufacturer
  • making modifications to the vehicle, or fitting non-standard or non-manufacturer approved parts during repairs
  • putting the wrong fuel or fluids into your vehicle e.g. oil or coolant
  • not following the warranty claim procedure correctly.

Before taking out a car warranty make sure you read the small print.

Here are the basic points you need to check.

Do Used Cars Come With A Warranty

When you buy a used car, it may still be under factory warranty, as many of these warranties are transferable to new owners.

The dealership is required to post a buyer’s guide on each vehicle it sells. This guide will clearly state whether the vehicle comes with any type of warranty. Beware of verbal warranty promises not included in the buyer’s guide.

If the buyer’s guide says the car is sold “as-is,” the dealership has no responsibility to cover any type of repair after you buy the car. Some dealers provide short 30-day warranties, but these usually only cover basic components and require you to visit the selling dealer for repairs.

However, there’s one type of car virtually guaranteed to have a warranty: a certified pre-owned vehicle.

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Doesnt My Car Insurance Cover Mechanical Breakdowns

No. Regular car insurance does not cover breakdowns, maintenance or wear and tear. You would need to buy an extended warranty or an MBI policy to cover repairs. Once you have a warranty or MBI policy in place, it does not replace your car insurance. These items are an add on to your already existing basic car insurance. Basic car insurance covers state insurance requirements as well as offering additional coverages like comprehensive, collision and underinsured motorists coverage to make sure you are insured if and when in an accident.

Coverage For Your Used Car

Should I Buy an Extended Warranty on a New or Used Car ...

An extended warranty won’t be all-encompassing. Some of the wear-and-tear type parts, items that wear down over time, won’t be covered by an extended warranty. There are different coverage tiers, too, so be sure to go over the fine print and find the warranty that’s the right fit for your specific needs.

It should also be determined who will handle the costs for any repair bill. Are the repairs completely covered? Will you be paying a deductible? Be sure to find out the answers to these questions prior to agreeing to an extended warranty.

Finding out who stands behind the warranty is something you’ll need to figure out, too. Some dealerships will offer third-party warranties. Make sure the warranty is backed by the manufacturer, not just the dealership or another company.

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Where Can I Get An Extended Car Warranty

You can get an extended car warranty from a number of places.

Firstly, if you currently have a car thats covered by a manufacturers warranty, you may be able to extend this for one year or more. This will depend on the manufacturer and you may need to meet certain requirements, such as getting your car serviced at one of their dealerships.

If youre buying a used car from a dealer, you will probably be offered some kind of car warranty. These will be of varying lengths, and some providers may include a limited warranty in the cost of your car then give you the option to extend this for an added charge.

However, you dont need to take out the warranty offered by a dealer. They may not always be the best option and can be more expensive than policies from independent providers and can come with stricter terms as, for example, you may need to get your car serviced at one of their dealerships during the term of your warranty.

If you do decide to get an extended car warranty, its worth comparing cover online from independent providers to see exactly what each policy covers, whats excluded, and how much it costs. This will help you decide which warranty is most suitable for you and whether it is worth getting.

What Is A Used Car Warranty

A used car warranty is a contract that promises to pay for the cost of certain car repairs. These warranties work similarly to the manufacturer’s warranty. When you experience a mechanical breakdown, you take your vehicle to a licensed repair shop for diagnosis. If your repair is covered by your warranty, the administrator will pay the repair shop, minus your deductible.

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What Does My New Car Warranty Cover

The whole car will be covered by a warranty, but there will be different warranties covering different parts of the car, such as for the car’s paintwork and a guarantee against corrosion, too. If you’re buying an electric vehicle or plug-in hybrid, you’ll find that the battery and drive system will usually be covered by a second guarantee that runs alongside the standard warranty.

Youll have a range of warranty options available when buying a used car, too. A pre-owned car from a franchised dealer will likely offer you a warranty, although the extent of the coverage you receive will depend on the car’s age. If the car is just a few years old, there’s a good chance it will be covered by the original guarantee because the warranty coverage on a new car is transferable between owners.

Breakdown firms such as the AA and RAC also offer warranty coverage on used cars, which some non-franchised car dealers use to help give their business a higher profile and their customers extra peace of mind.

Below we run down the different types of warranty that are associated with new and used cars, from the standard new car warranty to paint and battery cover in EVs, through to extended warranties and used car cover.

Extended Car Warranty: Age Limits

Should I Buy an Extended Car Warranty?

As vehicles get older and increasing numbers of components wear out, it gets more difficult and more expensive to take out warranty cover.

In many cases, policies will also offer less protection. For example, Warrantywise will only offer protection against sudden and unexpected failure due to wear and tear on vehicles that are less than ten years old, and with under 100,000 miles on the clock.

Once your car has reached 15 years old, or has covered 150,000 miles, then it no longer offers any warranty protection.

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Talk To The Buyer Should I Buy Extended Warranty On Used Car

An automobile buyer who offers his motor vehicle to you directly must definitely tell you regarding its background. When getting a made use of car, it may be a good suggestion to ask the adhering to inquiries:

  • When did you obtain it?
  • Did it ever before enter a mishap?Is there an issue that needs to be fixed on the cosmetic or mechanical degree?
  • Is there any type of evidence that pet dogs have remained in the vehicle?
  • Formerly, exactly how did this vehicle obtain used?

Keep in mind the owner could be informing you something thats not true. It is always best to validate all information youre informed via a VIN report or a mechanics exam.

When Does A Car Warranty Start

When purchasing a new vehicle, the manufacturers warranty starts immediately. Extended car warranties, on the other hand, usually do have a waiting period before coverage kicks in, generally 30 days or 1,000 miles, though that will depend on the type of coverage and the warranty provider.

This warranty period is applied to prevent car owners from filing claims on vehicles that are already suffering from pre-existing conditions or mechanical failures.

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File A Claim For Compensation

The Motor Vehicle Dealers Compensation Fund protects your deposits or payments up to $45,000, if a registered dealer fails to deliver on any part of the purchase or warranty.

You can apply for compensation up to 2 years after the dealer refuses or is unable to return your payment.

Using Your Extended Warranty

Should I buy extended warranty for used cars from my OEM ...

Once you sign the contract, there will be a short waiting period, usually either 30 or 60 days, 1,000 miles, or both. After that, any issues you experience under your contract will be paid for by the car warranty provider. For example, if you experience engine issues covered under your warranty, youll take your vehicle to an in-network repair shop, where the repair will be diagnosed. A claim will then be submitted to your warranty company. If the warranty company determines the repair is covered, theyll pay for the repair before or after its complete.

Depending on the terms of your contract, you may be required to pay in full for the repair and wait for reimbursement. Alternatively, your provider may pay the repair facility directly for you. Similar to insurance plans, most used car warranty plans require customers to pay a deductible for each claim, which can range from $0 to $200. Plans with lower deductibles have higher monthly payments.

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