Warranty Administrator
This is the company responsible for paying your automobile warranty claims. You should know, many times this is not the same company that you purchased the contract from. We recommend companies where you are dealing directly with the administrator, or a business where the contract is reinsured and managed by an “A” rated insurance firm. This way you are able to research their claims handling history before buying a warranty.
Extended Warranty
An auto extended warranty is a vehicle service contract between the automobile warranty company and you. If you buy a Toyota warranty for example, the company pays for repairs to your car that are covered by the contract. Extended automobile warranties are not to be confused with insurance policies. The service contract money is deposited in a “claims reserve account”, which is insured in the event the administrator goes out of business. An car extended warranty is the most confusing and lucrative merchandise that auto dealers sell. The terminology is difficult, and if you don’t read them carefully you may be in trouble. Some people erroneously believe they will get double the warranty coverage by waiting until the manufacturer warranty runs out to purchase their extended warranty. This is wrong, Auto extended warranties merely extend the original manufacturer’s car warranty beyond the basic warranty period of time. They do not pay you double coverage. The earlier you purchase, the cheaper it is. Should you buy a warranty for your new car purchase? Repair shop labor hour rates are climbing, and today’s vehicles have more pricey gizmos like DVD, power roofs, navigation and Bluetooth. When those expire you may pay thousands whether it’s on a Toyota or Honda or Ford. It’s recognized, these items will break and you may spend money. I choose to spend it on my warranty today at the most reduced price, than to spend thousands afterward on a BMW fix.
Continue reading Car Warranty Terms