Lately, auto repair extended warranty companies have been courting consumers’ hard earned dollars. Extended warranties can be a safety net that can save you money, but they are not without limits. You should weight the potential for failure against the cost of the warranty. Some of these warranties cost thousands of dollars and have limited “pay outs”. You may spend $2000 for a warranty and incur a repair cost of $2500 to replace a transmission only to find the next time you need the warranty, your benefit has been exhausted. Why give your money to a warranty company to only have them give it back “if” you use the warranty. If your vehicles’ factory warranty runs out in the first 18 months because of mileage, and you have bought an extended warranty, that warranty then becomes active. This warranty is probably for a time limit of 3 years and 72,000 miles. This means the mileage of the vehicle not how many miles you drive after the original warranty runs out. Therefore, the warranty is actually 3 years and 36,000 miles. Remember the average person drives about 22,000 miles per year, this effectively ends your extended warranty after only 18 months or so. Now if you figure the average person spends about $500 per year on actual repairs that are covered by most of these warranties. This means the average person would spend about $750 for repairs over the same period they paid $2000 dollars for coverage. Do the math and save the money for “If” you have a repair need. If the average person maintains their car properly they will come away from the experience without the need for an extended warranty, but make the call yourself on this one, I am only giving you the facts.

]]> http://blog.honestautoestimates.com/2009/01/warranties-that-extend/feed/ 0