If you’re considering purchasing extended warranty auto insurance for your vehicle, you should be aware of the types of coverage protection that are available to you and what the insurance actually covers. Generally speaking, extended warranty insurance coverage is available for both new and used cars and can be obtained at the time of the vehicle purchase or almost any time thereafter.
There are two types of extended warranty auto insurance coverage policies available: an extended warranty and mechanical breakdown insurance. Although both types of coverage will pay for certain parts and repairs needed for your vehicle, there are a couple of major differences in the two types of coverage.
An extended car warranty is usually offered to you whenever you purchase a new or used vehicle. You can purchase an extended warranty through the dealership that sold you a vehicle or you can shop for extended warranties from providers of this type of coverage. Extended warranties are not an actual type of insurance coverage and are usually not regulated by the Department of Insurance or Commissioner of Insurance.
What is covered under the terms of an extended warranty will generally depend upon the price paid for the warranty. As a rule of thumb, the more coverage an extended warranty provides, the more expensive the warranty will be. Of course, shopping for the best prices on extended warranties will help you get more coverage for your dollar, but better warranties always cost more money.
Extended warranties range from providing coverage for only the major components in your vehicle to providing coverage that comes close to a manufacturer’s new car warranty. However, all extended warranties offer no coverage at all while the manufacturer’s warranty is still in effect. Even if you purchase an extended warranty on a brand-new vehicle, the coverage will not actually take effect until the original manufacturer’s warranty has expired.
Unlike extended car warranties, a mechanical breakdown insurance policy is a true type of insurance coverage. These types of policies are offered by standard car insurance companies and pay for many types of common vehicle repairs as well as the parts needed to perform them. The level of coverage provided for car repairs will depend upon the type of mechanical breakdown insurance policy you actually purchase.
Mechanical breakdown insurance policies also differ from extended car warranties in the way that they are paid for. For example, most extended car warranties require that the coverage be paid for upfront. Whether it is by cash or rolled into a car loan. However, mechanical breakdown insurance policies offered by car insurance companies are usually added to your current car insurance premium and paid for in monthly installments. Most car insurance companies that offer mechanical breakdown insurance have several different types of plans available. Cheaper plans pay for only basic repairs and needed parts. However, policy plans with larger insurance premiums may provide almost bumper-to-bumper coverage.
It’s important for potential buyers to realize that extended warranty auto insurance runs the spectrum from full coverage for all auto systems with policies known as “bumper to bumper” extended warranty auto insurance, to more specific policies such as a power train warranty. Specialized auto protection policies can be set up to cover the most expensive parts of the vehicle, such as the engine and transmission.
The range of extended warranty auto insurance includes some extended warranty scams, where lots of restrictions in the fine print make payouts really difficult if a vehicle breaks down. It’s important to know what you’re really buying when you’re looking for extended warranty auto insurance.
This kind of insurance policy is often most helpful when you don’t have a good relationship with a local mechanic shop in your area. Drivers who feel they may get taken advantage of by mechanics can use extended warranty auto insurance to avoid high repair bills. On the other hand, if you have a detailed knowledge of your car and can negotiate with your mechanic, the extended warranty may be more money than it’s worth to you.
Car owners shopping for extended warranty auto insurance can keep all of the above in mind for getting good deals on this kind of policy.