If you are thinking about purchasing an aftermarket (non manufacturer) extended car warranty for a vehicle that you are either purchasing or already own, there are a few facts that you should be aware of. As the commonly referred to phrase, "extended car warranty" suggests, otherwise known as aftermarket auto warranties or extended service contracts, provide additional warranty coverage aside from the original manufacturer's warranty. With today's manufacturer warranties commonly being 5 years or 100,000 miles on the power train and commonly 3 years and 36,000 miles bumper to bumper, an extended car warranty can provide good coverage.
Before you purchase an extended car warranty plan, it's good to know how these plans work. Although most plans vary depending on the warranty company, most offer the same coverage. Be sure that you choose a plan that not only covers mechanical breakdown, but also normal wear and tear parts.
If you have an extended car warranty plan and your car breaks down, you will simply take your automobile to an approved service location (specified in the contract) that provides services for the warranty company. They will then file a warranty claim and will be paid directly by them, minus your deductible. In most cases, you have to pay this deductible up front at the time that the repairs are performed.
It's very important that you purchase your extended warranty plan from a legitimate, reputable company. There are many telemarketing companies that offer to sell extended warranties that aren't worth the paper that they're printed on. Be sure to read the fine print, check any customer review sites on the internet and also with the Better Business Bureau to see if they have a long history of complaints. This will usually reveal if you're dealing with a legitimate company or not. Also, be sure to ask them how long they have been in business and if they've been conducting business in your area for any length of time. Local car dealerships are also a good place to call for references.
There are a variety of extended car warranty providers. Thanks to the Internet, there are extended car warranties you can purchase from the convenience of your home computer, with a phone call to verify identity, should you be financing the plan. Any legitimate warranty provider will have a telephone number for you to call (normally toll-free) and I would not advise signing up with any warranty provider that does not have a 24 hour customer service number.
When purchasing a car, especially if you are buying a car with bad credit, you may find that the lender requires you to have an extended service contract on the vehicle. This protect the lender from loss if the vehicle has a major breakdown which causes many people to refuse to make payments (depending on the individuals, of course). If this is the case, be sure to compare offers from multiple warranty companies if possible, to ensure that you are getting a fair deal.