Car buyers looking to defray the cost of expensive car repair bills often consider purchasing an extended auto warranty contract from an auto warranty company.
How to Decide which Vehicle Warranty Company is the Best
Under the right circumstances the extended auto warranty can be a cost saver by covering the price of expensive repairs while the car owner only has to cover the cost of the warranty deductible. The more attractive extended warranties offer zero deductible contracts for some repairs.
While this sounds very attractive, anxious car owners need to take it slow and do some homework before selecting an extended auto warranty plan. Even more important than scrutinizing the warranty contract, consumers must take time to investigate the company that holds the contract. Read also: Renting Cars for Business or Pleasure.
The best and most attractive contract in the world is useless if the company is unscrupulous and doesn't honor the agreement. Before signing with an extended auto warranty company here are a few pre-contract items to consider:
Types of Extended Warranty Companies
Generally an extended auto warranty is offered either by the car manufacturer or an independent after market company. No matter which company is offering the extended warranty, take a few minutes to check out the company's financial stability. Find out their Standard and Poor's or Moody's or even their A.M. Best rating. Each of the aforementioned companies tracks the stability of financial and lending institutions.
An attractive extended warranty is useless if the company is financially unsound and is not around when coverage is needed.
Extended Warranty Company Better Business Bureau Rating
Consumers can find a wealth of free information through the Better Business Bureau with just a few clicks of a mouse. The BBB reviews such extended auto warranty companies and provide an alphabetical rating system ranging from A+ ( given to companies such as Auto Advantage, Inc.) to F (given to companies such as US Fidelis). Each rating is accompanied by a full report explaining why the company earned its rating. Read also: Tips for Buying Auto Insurance in Rhode Island.
Auto Warranty Company Marketing Tactics
Be wary of high pressure marketing tactics used by some extended auto warranty companies. Consumers who feel pressured or who have a limited time in which to take advantage of the "good deal," should forgo the deal. According to the Better Business Bureau, some of the less scrupulous companies trick unknowing car owners into purchasing contracts by sending letters advising the consumer that the current warranty on their year, make and model vehicle is about to expire. They go on to list expensive repairs that the particular vehicle will require and that if the consumer doesn't respond within 72 hours of receiving the letter, the offer would expire.
Other companies employ "robocall" tactics. Such tactics would trick consumers with recorded message advising the manufacturer's warranty on their vehicle is about to expire, thereby encouraging the recipient to "renew" the non existent coverage.
Such robocalls have been banned by the Federal Trade Commission effective September 1, 2009 and therefore are illegal and can result in a $16,000 fine per call. Anyone receiving such deceptive calls or are in receipt of misleading correspondence can file a complaint with the Federal Trade Commission.
To file a complaint, consumers can either call the Federal Trade Commission at 1-877-FTC-HELP or use their online Complaint Assistant form. Read also: Choosing The Coverage Amounts And Proper Deductibles.
Research Auto Extended Warranty Companies
With so much information available at the consumer's fingertips, consumers can sit in the driver's seat when it comes to purchasing auto extended warranty coverage. Don't feel pressured to accept a "good deal" until after the company offering the deal and the contract has been thoroughly investigated.