By Jim Donovan
PHILADELPHIA (CBS) – Are you in the market for a new car and considering an extended auto warranty?
In this week’s Angie’s List, Jim Donovan explains some things you should be looking out for before you decide to buy one.
Extended warranties are prepaid service contracts or vehicle service plans. They usually kick in after a certain number of miles or years, typically after the original manufacturer’s warranty runs out.
“If you’re going to be driving your car for a long time it might be something you want to consider,” said Angie’s List founder, Angie Hicks.
But if you change cars often they can be a waste of money. Also, these service plans can be offered by vehicle manufacturers, auto dealers, or independent third-party providers. So make sure you do your research before choosing to pay for that extended warranty.
“When shopping for an extended warranty take your time and do your research. It’s an important decision because the warranty is only as good as the company that stands behind it. Don’t feel pressured to buy one on the spot and make sure you understand the fine print,” said Hicks.
And don’t just assume you’re covered because you have an extended warranty. Frequently there are things you need to do to keep your protection.
“When looking at auto warranties, one thing that’s important to remember is you need to do proper maintenance. In some scenarios the warranty might be voided if proper maintenance isn’t done,” said Hicks.
Angie’s List Tips: Extended auto warranties
• Do you need one? An extended auto warranty isn’t for everyone. If you change cars every three years, an extended warranty makes no sense, because the manufacturer’s warranty is likely still in effect. But if you drive a car for several years, it may be something to consider.
• Buyer beware: Be wary of phone and mail solicitations from third-party companies to renew your original factory warranty. Avoid high pressure tactics used by some telemarketers; ask for details in writing. Don’t provide personal financial information such as your bank account, driver’s license number, credit card number or vehicle identification number to third-party companies before thoroughly vetting them.
• Do your homework: Research the company. Check with your state’s attorney general office for any complaints. Shop around for the best price: Don’t be afraid to negotiate and make sure you understand what’s covered in the contract. Ask about the cancelation policy: Most contracts can be canceled in 30 or 60 days for a full refund.
• How does it work? Before you sign anything, understand details/costs of the coverage, deductibles, etc. Ask if the repairs can be done by any auto repair company or if you are restricted to specific ones. And keep detailed maintenance records since many warranty plans may void coverage if you fail to do specific maintenance.