Extended car warranties can be hard to understand, but they are essentially plans that help you cover your expensive car repairs bills.
These plans, sold through dealerships or through third-parties, are designed so you pay a set fee each month instead of a sudden $1,000+ bill out of pocket. Whenever your car needs a big repair, the plan will cover the bill so you don’t have to.
Before you sign up for a vehicle service contract, here are some red flags that you should keep an eye out for.
The extended warranty salesperson is pressuring you
Many extended car warranties are sold in high-pressure environments, usually at dealerships, when you first buy a new or used car.
They may try to rush into buying a plan by saying that it’s a deal only available for a limited time. They may tell you that it’s simply just an additional fee added to your loan without explanation of the costs. Never feel pressured to buy extended car warranties. It should be a choice you make freely on your own time.
|Note: Beware of robocalls. They have increased significantly over the last year. Read our blog on how to stop extended car warranty robocalls.|
There’s no price transparency
The price of an extended car warranty can sometimes be between $1,000 and $5,000 depending on the car’s make, model, the condition it’s in and how long the coverage will last. There may be additional costs you’ll have to pay yourself when you take the car to the repairs shop (i.e., a deductible and portions of the repair not covered by the plan).
If you’re sold an extended car warranty and service plan, you should receive a clear explanation of the price. Unfortunately, traditional extended car warranties sold at car dealerships have huge markups and they make a huge profit because of it. They don’t want you to know exactly what you’re paying for and why.
Always look for a plan that offers price transparency and the lowest monthly price possible.
It’s difficult to understand which parts are covered
If you don’t have an easy-to-understand list of all the car parts covered with your plan when you’re purchasing it, imagine how hard it’ll be to know if you’re covered when you need a repair!
There are different kinds of coverage available. You can get extended car warranties that offer coverage similar to car manufacturer’s bumper-to-bumper warranties, in which you get coverage of all the car’s parts and systems. There are also more affordable options that offer coverage on your powertrain only (the engine, the transmission, the driveshaft, differentials and axles), which can still save you a lot of money.
If the seller of the extended warranty gives you a blanket statement saying “everything is covered” without a precise list, think twice before signing up.
You can’t choose the repair shop
Instead of having the freedom to take your car to the nearest repair shop or to a repair shop you trust, you may be required to take your car to a warranty-approved shop. This isn’t just inconvenient, but it puts into question the trustworthiness of the warranty company. Shouldn’t they honor the coverage you’ve paid for at any repair shop? What if the “warranty-approved” repair shop and the extended car warranty company turn against you and deny your claim.
The more freedom you have, the better. The right kind of extended car warranties should be able to give you the choice of where to go for repairs.
You have to pay money upfront and get reimbursed
When your extended car warranty and service plan forces you to pay money upfront with the promise that they will reimburse you later, you can be sure it’s going to be a hassle. You’ll likely have to get a lot of documentation together, ask the repair shop to give you detailed repair records, scan documents or send documents by mail.
The whole point of an extended car warranty is to save you money and make your life easier. You don’t ever want to sign up for a plan that makes you do extra work after you’ve already done your part by paying for the plan.
They have a slow and complicated claim process
A fast claim process is perhaps the most important feature of a quality extended car warranty. You shouldn’t have to sit on the phone for hours or wait weeks to finally be approved on a claim. Afterall, you depend on your car. The longer you wait to get repairs, the more your daily life is thrown off balance.
Before you sign up for any plan, be sure that the claims process is quick and simple. Ideally, you want to be able to take your car to the repair shop, get an estimate and have your extended car warranty company deal directly with the repair shop. After paying a deductible (if you have one), your repairs should get done immediately.
An extended car warranty that simplifies everything
Vehicle Repair Protection is a low-cost monthly subscription that you can trust. It provides you with clear explanations of what’s covered, your choice of repair shop and a quick claims process that you can start through the Uproar.car app. Included with your VRP subscription are a wide-variety of perks like 24-hour roadside assistance, discounts at shops and restaurants, and Car Cash that puts money toward your car maintenance.
Uproar.car has created vehicle breakdown coverage that is simple, trustworthy and affordable. Transforming the extended car warranty marketplace through technology and transparency, Uproar.car offers a full suite of worry-free, no haggle car care plans through low-cost, 100% online, monthly subscriptions that drivers can sign up for in less than five minutes. Get an instant quote today!