The fact is, auto warranty brokers search for the warranty that affords them the highest mark-up. Often, the consumer does not know who they are actually buying their coverage from and is unable to research the records of these companies. The companies supplying coverage to these brokers have the industry’s highest rate of Better Business Bureau complaints with several of them having over 100 Better Business Bureau complaints in the past 3 years. The brokers themselves also have a very high rate of Better Business Bureau complaints with one of them having over 300 complaints in the past 3 years.
BUYER BEWARE
Consumers should be aware that a warranty broker bears NO RESPONSIBILITY to them once the sale has been made. Here is what one warranty broker has buried deep in their web site:

 <Warranty Broker>. does not process or pay for any claims. These matters are handled by your warranty company. You are actually purchasing the warranty directly from the warranty provider you’ve selected and any claims should be directed to their claims department. Please keep the warranty company claims phone number provided in your vehicle in the event you need to have repairs done.

 By purchasing a warranty <Warranty Broker>., no contract is made between you, the purchaser and <Warranty Broker>. <Warranty Broker> does not agree to and is not liable for payment of any claims and is not liable or responsible for the actions or business operations of any warranty company.

Contrast that business model with buying your coverage direct. Direct providers are responsible for paying claims and since they can’t hide behind anonymous warranty brokers, it is easy for you to research their records. Warranty Direct is a direct provider of coverage to consumers as well as over 2,200 new and used car dealers, banks and credit unions and has a 28 year track record of paying claims.
Warranty Direct is NOT a broker or an Internet only company.  When you purchase from us, we agree to be liable for and pay your claims. It’s what we do and have done…for 28 years.

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

Extended 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.

* * * *

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 car 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.

Next to your house, your automobile is probably your biggest investment. Finding the right company to entrust your vehicles repairs is easy if one knows where to look. The following resources can assist you in selecting the right company.

Better Business Bureau – The Better Business Bureau (BBB) provides online access to a company’s BBB Reliability Report at http://search.bbb.org/ . The report will show pertinent information about the company as well as its complaint history. The BBB also has a special site for automobile warranty issues at http://lemonlaw.bbb.org/ .

WebAssured.com – WebAssured Business Background Reports give online buyers valuable insight into the companies behind the web sites. They show you instantly how responsive a company has been to complaints filed with WebAssured, whether a company is covered by their On-line Purchase Protection insurance, and other information about its physical location, management, and financial condition. Using this information, on-line buyers no longer need to take a leap of faith when ordering from a website for the first time. WebAssured also publishes verified customer testimonials. You can search for a company at http://www.webassured.com/search/search.cfm .

Dun & Bradstreet – Dun & Bradstreet (D&B) is the world’s leading source of business information and insight. Through the use of their D&B Web Log program, companies can become D&B listed by providing pertinent business information to them. Member companies will prominently display this logo on their web site.

Federal Trade Commission – The Federal Trade Commission (FTC) published an Auto Service Contracts FTC Facts for Consumers guide at http://www.ftc.gov/bcp/conline/pubs/autos/autoserv.pdf

State Regulatory Agencies – Many of the 50 states have licensing/registration requirements to make sure auto warranty companies are financially sound and/or properly insured. A growing number of states have very strict requirements when it comes to issuing licenses. While your state may not have these requirements, finding a company who meets the requirements in those states can provide you with peace of mind. California, Flroida and New York provide the most stringent licensing requirements. If a company can offer their products there, it may be an excellent indication of the quality of the company.

Internet – The Internet provides vast resources for consumers to access information. A simple web search at Yahoo.com or Google.com can unearth a lot of information about a company including consumer feedback.

The information above was provided by WarrantyDirect.com

Warranty Direct is the consumer division of one of the oldest and largest independent automobile warranty providers in the US. Their expertise in car warranties is unmatched with 28 years of experience, nearly 2 million automotive warranty contracts sold and over $500,000,000.00 in paid claims. In addition to offering their warranties direct to consumers, over 2,200 manufacturers, dealers, banks and credit unions choose to market their coverage. Why pay the dealer’s markup when you can select similar coverage direct from “the source”?
Click here for a free, instant online extended warranty quote.

Administrator:
The company that authorizes and pays the repair facility for repair work to your vehicle. The administrator works with the repair facility to make sure your claim is handled properly. As they are the company that pays your claim, their financial strength is the most important factor in choosing a warranty company.

All Wheel Drive (AWD)
All four wheels are driven by the engine. AWD systems are superior to 4WD because they can be used under any road conditions. AWD systems use a center differential to allow the front and rear wheels to rotate at different speeds. AWD provides better traction than front or rear-wheel drive.

Auto Warranty:
See Extended warranty.

Basic Warranty:
The specific terms established by each manufacturer to repair vehicles through a specified mileage and/or time period. All factory installed and many dealer installed parts are covered under this warranty.

Better Business Bureau (BBB):
The Better Business Bureau (BBB) has long been a means consumers have used to check out a company. In order to participate in the BBB Online Reliability Program, a company must have a satisfactory complaint handling record, agree to participate in the BBB’s advertising self-regulation program, agree to abide by the BBB Code of Online Business Practices, and agree to dispute resolution with the BBB. Most of the companies who participate in this program value their standing in the BBB, and tend to do a better job at handling complaints

Bumper-to-Bumper Warranty:
The most comprehensive warranty you can buy. It will cover all parts of your vehicle and will only exclude a small list. Because the coverage is so comprehensive, it will only list the few parts not covered. Most similar to the manufacturer’s warranty.

Certified Car:
Many cars sold used or off lease are certified by the manufacturer. This means they have undergone a quality inspection process prior to sale. Often, a limited powertrain warranty is attached to them. Most do not have extended or bumper-to-bumper warranties. There is no industry standard for certification.

Claims Reserve Accounts:
An insured account that the administrator will maintain to pay future claims.

Consumable Items:
Parts such as tires, batteries, clutch plates and wiper blades that are generally not covered under any warranty.

Corrosion Warranty:
Covers rust through perforation on sheet metal. Offered as original warranty on new vehicles. Extended warranties do not cover corrosion.

Deductible:
The amount that you must pay the repair facility for work when vehicle is being repaired. Many plans are offered with a zero deductible option.

Drive Train:
The components that transmit the flow of power from the engine to the wheels. The components include the clutch, transmission, driveshafts (or axle shafts in front wheel drive), U-joints and differential.

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.

 1. How long have you been in business?
2. Do you pay the claims or are you a broker? What company actually is responsible for paying the claims?
3. Are you able to offer coverage in all 50 states?
4. Are you a Better Business Bureau accredited business?
5. How many warranty contracts has your company sold?
6. Do you sell through car dealers and financial institutions or only on the Internet?
7. Do you cover wear and tear failures or only mechanical breakdowns?
8. Do you cover seals and gaskets?
9. Do you cover damage due to overheating?
10. Do you include $100 towing benefits with your plans? What about a full roadside assistance plan?
11. Can I preview the actual contract online?
12. What companies endorse your company?

While there are many other questions one can ask in evaluating warranty companies, the 12 above will provide a great start.

There are many factors one should consider before selecting a car warranty company. Longevity and a proven track record are two important factors. Warranty Direct is the consumer division of  Interstate National Dealer Services, Inc, one of the oldest and largest independent automobile warranty providers in the US. Our expertise in car warranties is unmatched with 28 years of experience, nearly 2 million car warranty contracts sold and over $600,000,000.00 in paid claims.

Warranty Direct is the exclusive warranty provider at Edmunds.com, Kelley Blue Book (kbb.com), NADAguides and Yahoo Autos! These industry heavyweights thoroughly investigated Warranty Direct before adding them to their sites. You will also find Warranty Direct recommended by hundreds of other automotive web sites, blogs and forums.

When MotorWeek, the leading automotive TV show for over 25 years, decided to do a story about automobile extended warranties, they began their research by contacting the various warranty companies, much like you are doing today. When the dust settled, MotorWeek chose to exclusively feature Warranty Direct. 

Warranty Direct is proud to have the best Better Business Bureau report in the industry. To put the report into perspective, in the 3 years that the report covers, we have paid out over 252,000 claims.
Another measure of consumer satisfaction is WebAssured.com, an independent company that oversees Internet commerce. Warranty Direct’s report can be viewed here:
A 3 time Forbes Magazine Top 200 Company. This speaks to our financial stability.

Dun & Bradstreet verified. Another measure of our financial stability.

2005 Consumer Reports Car Buying Guide:
“If you are considering an extended warranty, you don’t have to buy it from the dealer. Eliminate the middleman by purchasing directly from a warranty company, direct sellers like Warranty Direct. Their contracts are often both much cheaper and better than what the dealer offers.”

America’s Car Show with Tom Torbjornsen has featured Warranty Direct 3 times on their show.

AutoWeek Magazine 2006 Buyer’s Guide.
“The dealership is not your only option if you’re looking for mechanical insurance. Aftermarket extended warranty companies such as Warranty Direct are often more affordable and offer additional forms of coverage. One big advantage that Warranty Direct offers is it allows you to use the repair shop of your choice, be it a dealership, chain store or your favorite local garage.”

Fortune Small Business Magazine (June 2006) wrote ”
….companies that set the standard in today’s business marketplace- companies like Warranty Direct.”

Licensed in Florida, California and New York. Take the guess work out of selecting your warranty provider. Florida, California and New York have the strictest licensing and financial requirements for warranty companies. These states routinely audit Warranty Direct to insure proper funds are available and set aside to pay future claims, not to mention our claim handling practices.  In addition, Warranty Direct exceeds the financial and/or insurance requirements in ALL states where warranty providers are regulated. No other company offering coverage on the Internet meets all of these requirements.