Where to Buy and What to Pay

Where to Buy Your Extended Warranty

There are many places to buy a vehicle warranty but there are only a few places to buy it at a good price. You can purchase an extended warranty from the manufacturer, the dealer, a warranty company, a warranty broker, or a warranty sales rep.

Manufacturer and dealer warranties are notoriously expensive. You will save money by purchasing direct from the warranty company, a warranty broker, or a warranty sales rep. However there is one catch, manufacturers and warranty companies only offer their own warranties or in the case of dealers, brokers, and sales reps, warranties from companies they represent. Look for a warranty broker that handles multiple warranty products from multiple warranty companies.

The insider tip is most dealers try to sell you an extended service contract or extended warranty when you buy a new car and even offer to roll it into the payments. Dealers make a handsome profit on these policies. There is no immediate need to purchase a warranty right then and there. You will qualify for the exact same coverage at any time during the initial term of your basic warranty that comes with the car, and you will definitely find it at a better price elsewhere.

The absolute best price, best service, and best value is purchasing from a warranty broker who handles multiple warranty products from multiple “A” rated warranty companies. You can save up to 60% over a dealer warranty for the exact same policy the dealer is offering.

The insiders tip is look for warranty companies that are “direct insured”. Direct insured companies have another independent insurance company backing them. This is the safest and most secure purchase you can make. A step down in security is a warranty company backed by an RRG (Risk Retention Group) which is typically a group of warranty companies who have gotten together to insure each other. These are much less stable and much less regulated than a direct insured company. And the least secure purchase is a “self insured” company. You will pay a slightly higher premium for a direct insured warranty but safely securing your investment is well worth the few extra dollars.

Other tell tale signs of a good warranty broker are do they offer a money back guarantee, are they listed with the Better Business Bureau and D&B and are they bonded. This shows that they are serious about what they do and care about their reputation. In the case of bonded it means the broker purchased special insurance just to protect you.

All of the top warranty brokers can be found online. Do a Google search for “extended warranty” or “auto warranty”. The two main things to look for are the makes and models they cover. If they cover just about every make and model you can think of including higher mileage cars then they represent most of the major warranty companies. Secondly, do they offer to search thousands of policies and warranty providers to find you the best policy for your vehicle?

The insider's tip is only deal with warranty companies and brokers that will show you the warranty contract before you buy.

What to Pay for an Auto Warranty

There are no hard and fast rules. Reputable warranty companies and warranty brokers are in business to make money and they wouldn’t be in business for long if you weren’t saving money. Do expect to pay a fair price for a fair policy and don’t be fooled by a cheap policy with very little coverage. After all it’s all about saving money and peace of mind.