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.

Given Warranty Direct’s market leading position in the direct to consumer extended warranty market, we are flattered that companies (not so honest ones) are identifying themselves as Warranty Direct and falsifying our name on their Caller IDs.

Warranty Direct does not make unsolicited phone calls or use an automated dialing system. The only way we would contact you would be if you visited our web site (www.warrantydirect.com) and left your contact information. Were we to call you, our phone number (516-228-8600) would be displayed on your caller ID.

The company making these calls is using our company name and is in no way affiliated with Warranty Direct. Unfortunately, we have been unable to find out who this company is and have been unsuccessful in putting a stop to it.

Sadly, we receive several complaints of this nature each day. We are actively pursuing this issue and will continue trying to stop this company from tarnishing our company name.

We need your help. Do you know who these companies are? If you can provide verifiable proof of the company or companies doing this, we will pay a $100 reward upon receipt of verifiable evidence.

Consumers should be aware that these longer powertrain coverages leave them vulnerable to many expensive repairs on the vehicle. Special extended warranties called “Wraps” were created to close this gap in coverage.

The powertrain warranty will cover the engine, transmission and drive axles only. This represents about 25% of your car. While these covered parts can be very expensive to repair, you are left with no coverage for such things as air conditioning, brakes, electronics, fuel injectors, steering, front and rear suspension and many more. That’s where a Wrap warranty comes in; it fills the coverage gap between the powertrain and the thousands of uncovered parts on your vehicle.

Warranty Direct offers its bumper to bumper PowerWrap+ warranties on select vehicles and ExtremeWrap+ coverage for eligible Chrysler, Dodge and Jeep vehicles that come with the Limited Lifetime Powertrain Warranty. In addition, you pay lower rates on other coverages if your vehicle has an extended powertrain coverage from the factory.

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.

Certification doesn’t come cheap. For luxury cars, the average premium charged is 7.8% of its price, or $3,400. That money will buy you a full bumper to bumper coverage for 4-5 additional years with lots of money left over.

For all the talk of 120+ point inspections, limited warranties, vehicle history reports and others, there is no data to suggest that CPO vehicles are any more reliable than their non-certified cousins. Given that, why pay more for “certification”?