Car warranties are an incredible way to make sure that you are protecting yourself and your car even after you purchase it. They guarantee you a degree of safety no matter what life throws at you, helping really make sure you don’t have to be responsible for any issues or liabilities that come with the car. Extended car warranties and what they cover is much the same, but, depending on where you get them, they can have their downsides too. The secret to beating them is knowing what these loopholes and shortcomings are, and why extended warranties aren’t always as great as they’re made out.
Let’s explore it.
What Is an Extended Warranty?
Whenever you buy a vehicle from a dealer or professional, it generally comes with a warranty. New cars, in particular, come with manufacturers warranties but even used cars often have them unless you buy privately. Once these expire, or if you don’t have one to begin with, then you can buy a new warranty plan yourself. That’s where extended warranties come in.
Like all car plans, they have variation too. You can get brief plans to make sure you’re safe for the first few months to protect you from any nasty surprises or even for years while you keep your car going strong. There’s tonnes of flexibility to choose the right deal. That’s all the more reasons why you need to get the right one and not pay for a plan that won’t do you any favours.
What Extended Warranties Cover
To really understand how a warranty can be beneficial, you need to know what they actually do. As we said, it varies a lot, but form a general perspective there are always some key features, like:
- Engine parts
- Electrical Issues
These are just one of the more entry-level things too. More complex and more expensive warranties go much deeper. These cover things like:
It gets more and more comprehensive as prices go up. These do however all also have other factors that affect them too. Things like ages and mileage are some of the biggest factors, but even sticking to these can lead to issues too.
What Extended Car Warranties Don’t Cover
Now that we have looked at what kinds of issues extended warranties can cover you for, we also need to make sure that we look at the other side of the story too. Things like this can’t always be as good as they seem after all, or no one would make any money. Just like all insurance policies, there are some things that simply can’t be covered. It all comes down to what each individual extended warranty policy does and doesn’t include, and what makes it exempt.
Even on top of exemptions, you still aren’t always safe either. It’s actually not uncommon to still have to pay for things that should be covered by your warranty for certain reasons too. That’s right, even if you have done your homework you can be let down by the small print.
Let’s take a look at some of the biggest examples.
One key word that can end up costing you a lot more than you bargained for is betterment. This is what is referred to in your extended warranty policy when we look at getting new parts to replace the damaged ones. It sounds like an easy and straightforward fix, but in reality, it can be a bit more complicated.
Betterment is essentially where the replacement part to add to your car is actually better than the broken one. If the car part is hard to find or expensive to acquire, a better part can make your car worth more money as a result. If that does happen, your warranty provider can even ask you to pay the difference. It all depends.
Unmaintained Warranties and Missed Dates
Although a little bit easier to understand the reasoning, another big thing that catches warranty holders out, especially with extended warranties, is that you have to adhere to regular servicing. This alone can cause issues if you’re not careful, but generally speaking, there is some leeway (and services have a tonne of benefits anyway).
As well as having to get regular services though (or even half services), you need to do it in certain time frames. One of the biggest things here however is the time frame you have to do it Different policies have different specifics, but it can be a complete warranty-voider if you don’t get yourself there. You may be able to call and get wiggle room, but don’t risk it if you don’t need to.
Servicing and Mechanic Providers
Another stipulation of extended warranties especially form smaller less known companies that offer extended warranties, it’s also possible that your provider will restrict who can actually carry out the services you need as well. It’s not just about the when so much as the who.
Many franchised providers make it so that any work that you have done has to be through their affiliates, partners or just their company. That includes everything from parts to services, and it can take its toll on prices as well as practicality. It’s a good thing to bear in mind.
Vague Wear and Tear
Easily one of the most difficult factors to navigate in what is covered in a car warranty, especially an extended warranty, is what is actually covered in the wording involved with wear and tear. It is one of the most subjective terms in the car industry, and it needs to be understood before you go into anything.
Some people take fair wear and tear as an excess or value of repairs, others a mileage cap, and others still can just be a list of repairs. It is entirely down to the creator of the policy, so it’s well worth a conversation before you commit to anything that could take up your time. Don’t be afraid to ask any questions, and make sure that it is going to align with your needs.
One of the less discussed and much more circumstantial tricky points of warranties also comes from consequential failures. This is where your car can actually not be covered even if it sounds like it should be due to another error being the cause. For example, if a part that is not covered results in a part that is covered being damaged, that is not covered overall, and you are liable for the cost.
This factor alone especially when looking at engine parts can be a really big pain point and cost you much more than anticipated if you don’t know to expect it. It’s always worth getting the biggest picture as possible. There’s always a huge load of potential issues to keep an eye on. Servicing is a great way to help monitor this though.
Ultimately, extended warranties can often sound like a much better idea than they really are. They do offer you a great way to keep yourself safe in your purchasing and in your driving, both long and short term, but if you aren’t careful, you could end up paying for the repairs as well as the warranty too. Always make sure you read absolutely everything that you sign, and make sure you don’t fall for just another sales pitch. Be aware, think ahead, and always do what’s best for you.