Buyers At Disadvantage When Buying Used Car Warranty

Shopping for a used car warranty can be difficult if you don't know how to evaluate the warranty contract. One of the reasons warranties get a bad rap is that people buy them without reading the contract. Yes, unscrupulous companies will take advantage of a buyer who doesn't read the contract before buying.

One of the biggest problems is that some used car warranty salesman tend to exaggerate when discussing warranty coverage. And some do worse than exaggerate, they flat out lie and misrepresent the coverage. I was on a sales team of twenty-four, and one month, we had two salesman and one manager escorted from the building for lying to buyers. The company didn't tolerate this abuse, but some companies do nothing about it. Getting the best used car warranty requires knowing how to evaluate the contract. Even if you feel you're getting truthful answers, be sure to validate what you've been told by reading the warranty contract before buying.

So, how can you know if a used car warranty contract is excellent or just plain bad? I'm going to tell you what to look for so you can spot the bad ones and know the difference between a good and an excellent warranty.

All used car warranty contracts are divided into several sections and while the format may vary, they all contain the same information. If all the information isn't in the document, it's not likely a contract, but a sales brochure. May sure you're reviewing the warranty contract.

Most used car warranty contacts will have at least the following sections: Definitions, Terms and Conditions, Coverage, Filing a Claim, Service Department Guidelines, Cancellation Procedure, and Exclusions.

Each section is important and you need to be able to determine if a section is favorable or not. Once the contract passes your inspection, you're ready to make a decision. Securing an excellent used car warranty can be easy if you take this approach. But far too many people try to make this a spur of the moment decision and it shouldn't be. With the knowledge you can quickly gain, there's no reason to depend solely on what you're told by a salesman. If you're willing to take a few minutes to arm yourself with information, then you'll be in a position to know if the salesman is trying to help or scam you.

Let's look at the Definitions Section of the used car warranty. In some contracts you'll find the term Failure while in others you'll find the term Mechanical Breakdown or Breakdown.

The broadest used car warranty coverage is commonly referred to as Failure. But, make sure it's defined properly to give the best coverage available. Wear-and-tear coverage should be considered a Failure. Usually defined as: "a Failure will be deemed to have occurred when a covered part has worn beyond the manufacturer's tolerances".

Many companies offer no Failure Coverage in their used car warranty. Others only offer Failure Coverage until the vehicle reaches 50, 000 miles.

As much as 25% of all repairs needed are because of wear-and-tear failures, so this used car warranty coverage is important. Warranties without wear-and-tear coverage are often priced the same as those that do. So, be careful.

Did you know? Last year 37 companies entered the used car warranty market and by the end of the year 28 were out of business.

Don't be tricked into a bad used car warranty. They're are plenty of companies just out to make a buck and plenty that won't be in business in a year. So arm yourself with the information you need to make an informed decision. Knowledge is power when buying and I'm here to make sure you have plenty of it before making your decision.

By: Mike Gerald

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Mike Gerald retired after 25 years in sales of insurance and used car warranty contracts. He now uses his knowledge to help consumers make smart choices. To learn more, visit www.auto-warranty-spy.com