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Warranty Myths

(California Residents Click Here)

Fact or Fiction - Common Warranty Myths

There are so many different kinds, types, and levels of extended vehicle warranties, that it can be hard to separate rumor from truth. We've taken a couple of the most popular warranty myths and given you the straight answer so you can make your vehicle service contract purchase with greater confidence.

MYTH -You can only buy an extended car warranty or vehicle service contract from the dealer that sold the car.

FACT - You have many choices in extending your car's warranty. Yes, dealers are one source; but they're not the only source. Dealers may also be driven by sales or commissions goals which may keep them from being objective or offering the best coverage to fit your needs. Make sure you look for the most complete, reliable coverage at the fairest price, no matter who is selling the vehicle service contract.

MYTH - All extended auto warranties are basically the same; just get the cheapest.

FACT - There are hundreds of different types of extended auto warranties. Some are better than others. The only way to know how much you're getting for your money is to review the actual warranty contract. If a company won't let you see the contract, or includes questionable contract clauses, it doesn't matter what the price is. Walk away.

Some "red flag" contract language:
- At the sole discretion of the Administrator
- Parts may be used or recycled
- Vehicles must be maintained according to severe requirements of manufacturer (this can double your maintenance costs)
- Any covered part that has not failed (you want coverage for parts that fail, too). This includes seepage of seals and gaskets.
- Gradual reduction in operating performance not covered

MYTH - I don't need to buy a vehicle service contract or extended warranty until my manufacturer's warranty expires.

FACT - The newer your vehicle, the lower your rates will be. A common misconception is that you are buying double coverage if you purchase extended vehicle warranty coverage before your manufacturer's warranty expires. You are simply locking in the costs and rates now and protecting against increases in the future. You can also enjoy a much lower cost because you're buying coverage while the vehicle has lower mileage and is newer.

MYTH - You must purchase a vehicle service agreement (extended warranty plan) at the time of purchase in order to qualify for dealer financing.

FACT - Qualifying for financing has nothing to do with buying add-ons or extended vehicle warranty coverage. It has everything to do with the purchase price of the vehicle, your down payment or trade, and your credit score. There is no way that adding to the price of your purchase will increase your likelihood of being approved.

MYTH - A "mechanical breakdown" warranty offers the same coverage as a "wear and tear" warranty.

FACT - The best warranties offer wear and tear. Vehicle service contracts that contain wear and tear plans provide a higher level of protection. Many extended car warranties define "mechanical breakdowns" as defective parts or workmanship. Wear and tear however, includes parts that wear out over time from normal use. The older your vehicle is, the more important wear and tear coverage becomes.

MYTH - Extended auto warranties mean you never have to worry about a vehicle.

FACT - Whether it's a manufacturer warranty or a vehicle service contract (extended auto warranty), you're still expected to care for your vehicle and provide proper maintenance like regular oil changes and the like. If you haven't been caring for your vehicle as outlined in the owner's manual your vehicle may end up with a lot of problems that may not be covered by your plan. Be sure not only to do the routine upkeep on your vehicle, but also to keep accurate maintenance records and receipts.

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