1. Rust-Proofing: Some dealers charge up to $800 for this service, which sometimes amounts to no more than spraying a coating from an aerosol can in the wheel wells.
2. Fabric Protection: For a couple of hundred dollars, some dealers will try to sell you fabric protection for your car’s interior that will repel stains. You know it as Scotchgard.
3. Paint Sealant: This is another instance where the dealership hopes the car buyer will be gullible enough to believe that it’s using some special technique and material that’ll keep your car’s paint looking factory fresh
4. Window Etching: Another easy-money markup for car dealers; they etch your vehicle’s VIN on a window so that your car can allegedly be tracked in case it’s stolen.
5. Alarm System: Many cars come with a basic form of security, such as coded keys, but many dealers will also try to sell you a full-featured alarm system.
6. Extended Warranty: Since vehicles come with longer and more comprehensive warranties these days, extended warranties are usually not worth the extra money. If you plan to hang onto the vehicle for a long time, an extended warranty can be a good investment if and when your car needs major repairs. But don’t buy it from the dealer, since you can often get a better deal through independent insurers, such as Warranty Direct.
7. CD Changer: The price of a CD changer at a dealership can be twice what it is at a car stereo shop or electronics store.
8. Rear-Seat Video: Whether to choose this dealer option is not as easy to decide as the ones above.

Consumer Reports says almost the same thing:

“Dealerships often try to sell you extras that boost their profit margin but are a waste of you money. They can include rustproofing, fabric protection, paint protectant, or VIN etching, in which the vehicle identification number is etched onto the windows to deter thieves. Don’t accept those unnecessary services and fees. If you see those items on the bill of sale and you haven’t agreed to them, simply cross them out and refuse to pay for them. Vehicle bodies are already coated to protect against rust. And recent CR reliability surveys show that rust is not a major problem with modern cars. You can treat upholstery and apply paint protectant yourself with good off-the-shelf products that cost only a few dollars. If you decide you want VIN etching, you can buy a kit to do it yourself for less than $25, instead of the $200 that some dealerships charge. Also think twice about an extended warranty. It can cost hundreds of dollars. But if you buy a model with good reliability or if you expect to have the vehicle only for five years or less, it often isn’t worth the cost.”

Regarding Car Warranties, US News & World Report says:

“The dealer’s extended warranty isn’t necessarily the best deal; in fact, it usually costs more. Plus, you’re in a high-pressure situation at the dealer and might not be able to read the fine print. Finally, if you buy the dealer’s extended warranty, you might be required to return to that dealership to get it honored – which could become a problem if you move.”

So save yourself some money:

• Skip the rust proofing
• Buy your own can of Scotchguard for your cloth upholstery as well as the carpeting and matting
• Say no to paint sealant which is often just a wax job that you can do yourself or pay the neighbor’s kids to do
• For your alarm upgraded stereo and video systems you can often find a better system cheaper at your local car stereo shop or a big box retailer like Best Buy
• Window Etching – check with your local police or sheriff department – a lot of them hold free etching days like the Amhearst Police Department
• Car Warranty or Vehicle Service Contract – contact Warranty Direct at 800-632-4222 for your best deal on an Auto Warranty

In order to circumvent these special licensing requirements set forth, there has been a recent influx of product warranties being offered on the internet by a variety of extended warranty brokers. Product Warranties are not licensed, are not closely regulated, and do not have to be guaranteed by an insurance company. Even if a product warranty purports to be backed by an insurance company, the insurance company may not be licensed, financially strong, or actually back the warranty.

Warranty Direct has been licensed as a warranty provider in all states. In addition all of our plans are insured by an A- Excellent AM Best rated insurance company. For further information, please call one of our Certified Advisors at 1-800-632-4222. Click here to update and view your quote.

Some questionable terms found in product warranties are as follows:

• Vehicle Protection Kit ? The administrator will ship the Vehicle Protection Kit to the purchaser of this product warranty upon remittance of this agreement from the seller. The kit contains products for vehicle protection with instructions and other important information pertaining to this product warranty.
• The total of claims paid shall not exceed the wholesale value of the vehicle at the time of claim initiation.
• Purchasers may not perform their own maintenance for product warranty requirements.
• Pre-Existing ? A condition to a covered component of the vehicle, whether known or unknown to the purchaser, that existed prior to the product warranty purchase date or which may reasonable be assumed to have existed prior to the product warranty purchase date.

Sadly, unlicensed warranty sellers have become epidemic. Buying from an unlicensed warranty seller is risky as they do not meet the high standards required by your state. In order to be licensed, a warranty firm must be financially viable, operate within the laws and file their rates with the state. Unlicensed firms may offer no protection to you should the company go out of business. A licensed seller will be audited annually to make sure their finances are in order.

Many of the unregulated companies offering these plans are referring to them as bumper to bumper coverage, even though they only cover a short list of items. A lot of this misinformation is causing consumers a lot of confusion about the coverage they actually have. Sadly, most people won’t realize that they bought a worthless plan until they have a major claim denied.

Read more about product warranties at the St. Louis Post-Dispatch.

Independent Research Firms

A company’s transparency with their customers is key. During online research, searchers are bound to come across web sites that profess to perform “independent” research, when in actuality they are simply a portal site for an extended auto warranty broker. They’re easy to spot when they conveniently recommend only one “Editor’s Top Choice” throughout the site or blog while claiming to be an independent research firm. Often, these sites print misinformation about other warranty companies in an effort to fool the consumer.

Become a Well Informed Auto Warranty Buyer

WarrantyInfo.com has always clearly stated that we are the official blog of Warranty Direct. We use this blog to give you clear, factual information about extended auto warranties so you, the consumer, will be well informed and able to make the best decision on your extended vehicle warranty purchase.

What You Need is the Truth

We were shocked and dismayed that one new “independent research” site printed several pieces of misinformation about Warranty Direct. One of our loyal customers let us know about a disengenuous site, AutoWarrantyResearch.com. The site states inaccuracies and deceptions that we feel we must respond to.

1. Warranty Direct plans are backed by insurance companies that have A- Excellent ratings with A.M. Best. Warranty Direct is NOT “self-insured” nor are our plans backed by a Risk Retention Group. 
2. Warranty Direct is the direct-to-consumer division of Interstate National Dealer Services, Inc. Interstate has been in business for over 28 years and supplies extended warranties to car dealers, financial institutions and leasing firms across North America.
3. This disingenuous web site links to an erroneous business report about Interstate/Warranty Direct despite being told that it contains errors. While we are a privately held company, our sales last year were well in excess of $100 million and our asset base is in excess of $350 million. Our 28 year track record of paying claims and customer satisfaction are well documented throughout this site.
4. Several of the pages on the WarrantyDirect.com web site have a counter that ticks off the amount of claims we have paid since the inception of our business. Today, it stands at over $600 million and increases by almost $100,000 each day. The “independent research” site would try to have you believe that we are claiming to have paid that amount this year. We find that notion plain silly.

Of course we hope that you’ll decide Warranty Direct is the right company for you. As our customer, we pledge to give you the best value and service in the industry.

Give us a call, we’re happy to answer any of your questions about our coverage, the claims process, etc… You can also get a free extended auto warranty quote on our website at WarrantyDirect.com.

There are many different levels of coverage available.

Exclusionary Warranties – These are the highest level of coverage one can obtain and are often referred to as bumper-to-bumper warranties. Like a new car warranty, they will cover ALL parts of your vehicle except a small list of exclusions. The exclusions are typically for routine maintenance (oil changes, tune-ups), cosmetic items (seat fabric, carpeting, body molding), and consumable items (battery, brake pads, wiper blades). Read the exclusions carefully as they can differ widely among warranty contracts. Some companies will exclude commonly repaired items like stereo systems, oxygen sensors and more.

Named Component Warranties – These types of coverages will provide a list of the parts covered and are available in many different levels. In order to do a proper comparison, you must read the detailed list and not just the system categories. 

Roadside Assistance – Better extended warranties will provide complete roadside assistance membership with each contract. Membership will provide you with 24×7 access to a toll free number to call for help for such things as towing, flat tire assistance, lost key and lockout service, battery jump start, fluid delivery and more. These plans have no deductible and are not tied to covered repairs only.

Lesser warranties provide limited towing benefits (often $50 or $75) that are only available to you for a covered repair. These will require that you arrange for towing on your own and seek reimbursement for the fees you pay.

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.

There are as many variations in warranty contracts as there are models of cars.  If you know where to look, comparing them is quite easy. Never take the marketing hype on a web site or the explanation of a salesperson as to exact coverage details. Read the contract – the devil is in the details.

Definitions…

Each car warranty contract will have a section called “Definitions”. The terms defined here are used throughout the contract. Knowing what they mean and what to look for will allow you to judge the level of coverage offered.

The warranty administrator will be named here; now you know what company to research.

How a contract defines what it will pay for is often found here. Look for the term(s) failure, breakdown or mechanical breakdown. Read these definitions very carefully as they determine the type of coverage you will be receiving.

The broadest and best level of coverage, commonly referred to as wear-and-tear is what you want. Wear-and-tear coverage will often be defined as “a Failure will be deemed to have occurred when a covered part has worn beyond the manufacturer’s tolerances”. Few warranty companies offer wear-and-tear coverage for the full term of the warranty. Some offer no wear-and-tear coverage and others only cover wear-and-tear failures until the odometer reaches 50,000 miles.

Lesser coverages will only pay for mechanical breakdowns. These extended warranties define “mechanical breakdown” as a defect in parts and workmanship as supplied by the manufacturer, or a defect that makes the part unable to perform the function for which it was designed. Often, they will state that the gradual reduction in operating performance (wear-and-tear) is not covered. Service contracts that exclude wear and tear will not cover repairs needed because a part’s performance has gradually deteriorated because of normal wear and tear, unless a mechanical breakdown has occurred. As vehicles age, most repairs fall into this category.

The more miles on a car when a repair becomes necessary, the more likely it is that the repair will be needed because a part wore out, rather than because the part broke due to poor manufacturing.

Terms and Conditions…

Term of contract – Does coverage start the day you buy coverage or the in-service date (the original purchase date of the vehicle)?

Parts and Labor – Does the extended warranty contract restrict payments to national labor guides? If so, plan on sharing in the cost of each repair needed. Does the warranty contract allow the use of new parts or does it call for used and recycled parts? Will diagnostic charges be paid for? What about sales tax?

Deductible – If you select a plan with a deductible, how is it applied? The best extended warranties will apply the deductible on a repair visit basis. In other words, no matter how many items need to be repaired, you will pay only one deductible. Beware of plans where you are required to pay a deductible on each part needed for a repair.

Complaint Resolution – The best extended warranties will offer third party (often the American Arbitration Association) complaint resolution if a dispute can not be handled between you and the warranty administrator.  Beware of warranty contracts that severely limit your rights should a dispute arise. Often, you will be required to handle disputes in the county the warranty company is located in.

Exclusions- It is vitally important to read through the list of excluded items. This is an area where many things can be hidden.

Some companies hide their wear-and-tear exclusion in this section of the contract (i.e. the gradual reduction in operating performance is not covered).

Common parts and repair costs can also be excluded from repairs (CV boots, seals & gaskets, stereo systems and speakers, shop supplies, fluid removal fees, nuts/bolts/fasteners [often a cause of the failure], repairs where a Technical Service Bulletin has been issued,

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.

As more consumers learn that there are alternatives to the high price of dealer sold extended warranties, the number of companies and web sites offering them have exploded. How do you know which companies you can trust? How can you research the companies? What resources are available to you?

Warranty Direct, the oldest and largest provider of direct-to-consumer automobile warranties provides you this comprehensive guide to researching and selecting your warranty provider. We understand how difficult a process this can be. We welcome your phone calls to discuss the issues below in even greater detail.

Warranty Pricing…

A question we are often asked is why there is such a wide range of prices for extended warranties. The best advice we have heard to date is this, “Good extended warranties are not cheap; cheap extended warranties are not good”. As you read this White Paper, you will see the many areas that coverage costs can be lowered. Bear in mind that lower cost coverages cover less and will leave you paying out of pocket on most claims.

The Warranty Company…

Warranty Seller – In most instances, this company is a broker offering coverage(s) from regional, third-party warranty administrators. Once the warranty is sold, you will not deal with the seller again. You want to make sure the warranty seller remits payment to the warranty administrator and your coverage is in force. Warranty brokers typically look for the cheapest coverage available so their markups can be higher. Often, they are not concerned with the quality or level of coverage. As they frequently change the companies they represent, they do not develop long-term business relationships that are most beneficial to consumers.

Few warranty sellers are direct administrators of their warranty coverage. Purchasing direct from an administrator is beneficial because you know where your money is going. You maintain the relationship with the company throughout the life of your extended warranty; in other words, the direct administrator will sell you coverage, provide customer service, offer financing and handle all your claims. Buying direct from an administrator also makes it easier to properly research the company that will be responsible to pay for your repairs over the next 3, 4, 5 years or longer.

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.

Internet Only Warranty Companies – Based on our 14 years of selling coverage direct to consumers on the Internet (and 28 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.

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.