Credit Union Extended Car Warranty

Do I need an Extended Auto Warranty?

Do I need an extended auto warranty? Many people often ask this question. As with most things the answer is, it depends. The first thing you have to understand is that all extended service contracts or extended auto warranties are not the same. As such, it is imperative that consumers do their homework. Extended service contracts are available through a wide variety of sources, banks, credit unions, auto dealers and direct to consumer websites. No matter the channel you choose to purchase from, you need to ask a few simple questions.

Is the plan backed by an insurance company?
Who is the administrator?
What is the BBB rating of the company selling the plan?
Is the plan backed by a Risk Retention Group?
Finally, ask yourselfDoes the price sound too good to be true?

Depending on the answers, this should help you decide if the company you are considering is legitimate and offers a superior product. For the record, any company who does not have an A rated or higher Insurance company behind it, you do not want. An A rating is a sign that company is financially stable and well capitalized to pay claims.

Now that you have selected a potential company, you need to decide if a plan right for you. Vehicles today are more complex than ever and labor rates for repairs are increasing. As such, vehicle service contracts allow consumers to hedge against further rise in labor and parts price increases and protect against unforeseen repairs. Typically the following criteria indicate if you need a vehicle Service Contract.

If you plan on keeping the car for more than 2 years then extended warranties are typically worth the investment.
If you worry about an auto mechanic taking advantage of you, then an extended warranty is worth the investment.
If your monthly budget is tight and an unexpected repair bill would lead to financial hardship then an extended warranty is for you.
If the cost of the service contract is greater than 30% of the vehicles value, you typically do not need a service contract.
If you recently refinanced your vehicle or the Loan To Value of the vehicle is greater than 100% you should have vehicle service contract.

The above referenced criteria is by no means a complete comprehensive list of the questions you should ask yourself, but rather they are intended to assist you in determining if an extended auto warranty is right for you. Consumers should always carefully weigh their needs against other alternatives such as buying a new vehicle or starting an emergency vehicle repair fund.

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3 Nov 2010 at 8:33pm Get your warranty for your car Don't forget to share with me in my blog tags: car_insurancecar_quotesauto_warrantyTechnology