You can also download the file by clicking here: Tom Torbjornsen Explains How To Purchase A Used Car Warranty

To hear the entire show visit America’s Car Show’s Sirius/XM Radio Archives and select the July 4th’s show.

Warranty Administrator – This is the company that actually issues the warranty and is responsible for paying any claims. This is the company that should come under the closest scrutiny by consumers. Buying coverage direct from an administrator offers the most security as your money goes directly to the company responsible for fulfilling the obligations under the warranty contract. You will also be able to obtain the same coverage they sell through car dealers and avoid the car dealer’s markup. Administrators will offer you pre-sale counseling and after sale support.

There are many warranty administrators (national and regional) with varying business models. You should select a company that offers their coverage through many different channels and not just the Internet. Like insurance companies, the larger the pool of warranty holders, the more likely the company is financially stable and has adequate funds to pay future claims.

Regional warranty administrators tend to be small and have a smaller base of customers. National warranty administrators will offer coverage through car dealers, financial institutions (banks, credit unions) and may even handle warranty programs for manufacturers. With a larger, more diverse customer base, these companies are more financially sound. When a warranty administrator handles coverage for banks, credit unions and manufacturers, you can bet those companies did a lot of research before selecting a warranty partner.

More and more states are regulating the sale of extended warranties. Larger states like California, Florida and New York have licensing requirements and have done the homework for you. If a company is licensed in all of these states, that is a good indication of a stable company and one dedicated to compliance.

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Internet Only Warranty Companies – Based on our 14 years of selling coverage direct to consumers on the Internet (and 27+ years through car dealers, banks and credit unions), we have seen companies with this business model come and go. While the Internet allows consumers to buy products at more affordable prices than traditional selling channels, companies that only do business on the Internet present a risky business model.

Internet only companies are loosely regulated and some are not regulated at all. As they do not sell through car dealers or other channels, they are able to bypass the regulatory requirements that more and more states are implementing to protect consumers. These regulatory requirements most often deal with the company’s financial health.

By only selling warranties on the Internet, these companies are not able to amass a large customer base and often are not able to set aside appropriate funds to pay future claims. They take in money on Monday to pay claims on Tuesday. Couple this with a lack of regulatory over-sight and you have a recipe for disaster.

Questions you should be asking…

How long has the warranty administrator been in business?
Have they been around long enough to have been through several claims cycles?
Do they set aside adequate funds to pay future claims?
Do you sell your products only on the Internet?
When you type their company name into a search engine, what are their customers saying about them?
Are they members of the Better Business Bureau?
How many complaints do they have on file?
Are they members of WebAssured.com?
Are they Dun & Bradstreet verified?
Are they able to do business in all 50 states?
Are they recommended by reliable, trusted automotive web sites?
Do they have a formal complaint resolution process in their contract?

About Warranty Direct

Founded in 1980, Warranty Direct is the direct-to-consumer division of one of North America’s leading providers of service contracts and extended warranties for automobiles. Through its automobile extended warranty portals, www.warrantydirect.com, www.carwarranty.com, www.warrantyinfo.com and www.warrantydirect.ca , Warranty Direct leads the industry in efficient and expedited claims handling, impeccable customer service and a technology infrastructure that far surpasses the industry standard. Coverage is available in all 50 states and many parts of Canada.

For a free, instant online extended warranty rate quote, please click here.

The $1,800 extended warranty will end up costing you about $2,650 with a 5 year loan at 8% interest. And, that figure doesn’t even included the commission that you will be paying to the salesman, the finance guy and the dealership for acting as the broker!

The Alternative to High Priced Dealer Sold Extended Warranties.

Buy direct and buy smart. Take advantage of Warranty Direct, offering consumers the same extended warranties sold by dealers without the middleman markup. Even better, you can read the actual warranty contract before you buy. With a track record that is second to none, why not get a free quote today?