Who Are You Really Buying Your Car Warranty From?

Did you know that in most instances, the company you are buying your warranty from has nothing to do with paying your warranty claims? The safest way to buy an extended automobile warranty is to buy direct from the warranty administrator.

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.

Should You Finance Your Extended Warranty With Your Dealer?

 The short answer is no. The high pressure car salesman who tries to lure you into buying an extended car warranty by rolling the price into the sales price of the vehicle is simply trying to increase his commission. While rolling the extended warranty into your car loan may sound like a good idea, please keep in mind that you will be paying 6-10% interest for years on that extended warranty.

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!