Extended Warranty Contracts – Buyer Beware
Extended Warranty Contracts – What They Don’t Want You to Know
The Internet is littered with web sites selling cheap extended warranties. These companies hope you’ll be blinded by low prices and not do the necessary research into what kind of coverage they are really offering. Cheap warranty contracts are full of clauses that will cost you dearly in the long run. Here are a few examples from 2 of the leading “cheap” warranty providers that have popped up on the Internet recently. Items that are underlined are the areas you should be very careful of.
THESE CLAUSES DO NOT APPEAR IN WARRANTY DIRECT CONTRACTS
BREAKDOWN” or “Mechanical BREAKDOWN” means the event caused by the total failure of any COVERED PART to work as it was designed to work in normal service. Please refer to the wording under exclusions for a listing of conditions under which the failure of a COVERED PART is not considered a Mechanical BREAKDOWN.
“Repair Cost” means the parts and labor expense necessary to repair or replace any Covered Component that is the result of a covered Mechanical Breakdown , subject to the exclusions set forth herein. We may use replacement components of a like kind and quality that may be rebuilt, remanufactured, or used. Parts pricing will be determined by the lesser of Your Vehicle manufacturer’s suggested retail price or the suggested retail price of a like kind and quality part, whichever is authorized by Us . Labor will be determined by a current nationally recognized flat rate labor guide.
Pay the CONTRACT HOLDER or the REPAIR FACILITY for repair or replacement, as WE, deem appropriate, of the COVERED PART(s) which caused the BREAKDOWN if the CONTRACT HOLDER has met his/her obligations as described in this Contract and if the BREAKDOWN is not excluded under the exclusions section of this Contract. Replacement parts can be of like kind and quality. This may include the use of new, remanufactured or used parts as determined by US. Labor will be authorized based on a nationally recognized labor manual.
BREAKDOWN caused by contamination (Foreign objects or substances including but not limited to Sludge) of or lack of proper fuels, fluids, coolants or lubricants, including a BREAKDOWN caused by a failure to replace seals or gaskets in a timely manner
A BREAKDOWN caused by overheating
This is a vehicle service agreement between the “Purchaser” (Agreement Holder) and the “Obligor.”
“Mechanical Breakdown” means the inability of any covered part(s) or component(s) to perform the function(s) for which it was designed due to defects in material or workmanship. Mechanical breakdown does not include the gradual reduction in operating performance where a mechanical breakdown has not occurred.
Any repair for the purpose of correcting engine compression or correcting oil consumption when a mechanical breakdown has not occurred. Valve grinding, valve guides, stuck valves, burnt valves, burnt piston, and/or stuck rings are not covered.
Any failure related to a previous repair.
Engine block and cylinder heads are not covered if damaged by overheating, freezing or warpage.
It’s no surprise that the Better Business Bureau reports states this about one of these companies:
The BBB processed a total of 96 complaints about this company in the last 36 months,
Clauses like those above can cost you hundreds, even thousands of dollars in repairs. Don’t be fooled by low prices alone as they are often accompanies by low levels of coverage and service.
Looking for high levels of coverage to fair process? Visit WarrantyDirect.com and find out why they are the most recommended provider in North America.
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Filed under: Consumer Affairs, Extended Car Warranty Coverage, Warranty Direct
After reading through a few of your blogs I can see that it’s obvious that the warranty providers mentioned above do not have wear and tear coverege like Warranty Direct does…Always read the small print!!!!