So, you recently received a phone call or some type of correspondence from an extended warranty company looking to protect your vehicle from mechanical breakdowns and repairs? The first thing that runs through your mind is that the offer is a scam because it is not from the dealership where you purchased your vehicle. I can attest to countless robot calls I receive from car warranty companies daily and I will be the first to admit that it is extremely annoying. These days it is extremely difficult to know who you can trust especially when you are conducting business over the phone with people you have never met before. However, there are also plenty of credible third-party companies who can provide you with extended warranty coverage that can be used at your dealership or any certified mechanic shop. It is important you conduct your own due diligence on any extended warranty company seeking to do business with you before you first contact them. If you are not sure where to begin your inquiry into an extended warranty company, I recommend conducting a simple google search of the company’s name. From there the company website can answer most of the questions or concerns you may have. During your search if you find out there is no public information on the company, it is probably best to avoid doing business with that company. Here is a list of things to consider about your potential extended warranty coverage provider before you make any type of financial commitment.
1) Length of time in business
An extended warranty company is just like any other insurance company. A company that has been in business for at least twenty years means a couple of different things for you as the potential customer. First, you can feel confident that your provider will still be in business when it comes time use your coverage. Secondly, if an insurance company can manage to stay in business for at least twenty years they have proven that they are a company that has done an excellent job of managing their risk and paying out claims in order to stay in business.
2) Methods of contact
How your warranty company chooses to contact you says a lot about that company. If they are constantly harassing you by phone every single day, it would be best to avoid doing business with them. I personally recommend doing business with companies you have either looked up yourself or companies that contact you by mail to offer you the coverage. Any company that sends you an offer by mail is simply putting the ball into your court for you to make the decision about whether you want coverage on your vehicle. It means they are confident in the product they are providing and respect the fact that as consumers, most of us despise telemarketers. Also, as the consumer it gives you plenty of time to conduct your research before you decide to give them a phone call.
3) Customer reviews
Reading customer reviews can be helpful in deciding if you want to move forward with a company, but do not base your decision strictly on customer reviews. Most satisfied customers never actually take the time describe how great of an experience they had with a company. However, when it comes to complaints consumers are more likely to express their dissatisfaction. Even Disney World, the happiest place on earth has negative reviews, so do not put much stock into the negative opinions of other. It is highly recommended that you focus on reading the positive reviews first and then take notes on any negative reviews. This way you can ask the companies coverage specialist questions or voice your concerns about the reviews that you have read.
Knowing that when you sell your car the policy can be transferred to the new buyer can make a huge impact on your decision. Having extended warranty coverage on an older model vehicle can increase the value of the sell and attract more buyers.
5) Refunds and Review Periods
Take the time to go over all refund and review period policies. Some states protect consumers with mandated review periods to cancel the coverage. For instance, in the state of California the review period is 60 days. After the sixty-day period it is important to find out if there is a prorated refund option. A prorated refund returns money back to you for coverage that goes unused. Once your company mails out your coverage information use your review period to go over all the information such as: terms, conditions, limits of liability, and maintenance requirements. By doing this you reduce the risk of being unpleasantly surprised when you either cancel the coverage or file a claim.
6) Cost & Waiting periods
When it comes to cost remember, you get what you pay for! Just because you purchase a cheap plan does not mean you purchased a plan that is beneficial to you. Be realistic about the cost of your coverage by finding out what the average cost of repairs are for your vehicle, as well as what the current labor rates are in your area before you first make contact. For luxury vehicles labor can cost anywhere from $150-200 dollars per hour, so expect those cost to be reflected in the price of the coverage. Most extended warranty companies have varying levels of coverage, so if you are on tighter budget remember to ask your coverage specialist about other available options that would work better for your budget.
As a consumer you are managing your own level of risk with your vehicle. The older a vehicle gets, and the more miles put onto the vehicle increases its’ risk for mechanical or electrical breakdowns. Like any an insurance, with mechanical breakdown protection you are taking a gamble as to whether you think your vehicle will breakdown, but just because you think your vehicle will not breakdown does not make it a smart gamble to go without the coverage especially if you do not have at least $5,000 dollars set aside for emergency repairs after all your monthly bills are paid. At Service Protection Direct you can feel confident that our coverage specialist will go over every aspect of your coverage, work with your budget, and satisfactorily answer any questions you might have. Call us today to at 1-800-986-3608 to find out how we can assist you in reducing your vehicles financial risk to you.