Every new car purchased comes with a factory warranty. A standard manufacturer’s warranty promises that every vehicle that leaves the factory meets a high standard of quality.
If the vehicle has a defect or experiences a mechanical failure, the manufacturer covers the repairs. However, a manufacturer’s warranty is only in place for a limited period of time. When the factory warranty expires, the repairs will not be covered.
This is where an extended auto warranty comes in.
Usually, an extended warranty is sold by a third-party provider or by a used car dealership to cover repairs after the manufacturer’s warranty has expired.
The best extended car warranty will usually come with added extras, such as 24-hour roadside assistance, trip-interruption cover, and more.
Here’s how an extended auto warranty works, how it differs from auto insurance, and how it can give you peace of mind.
How an Extended Warranty Protects You
While an extended warranty and auto insurance may seem like the same thing, they are very different and protect you in different ways.
Auto insurance protects you against liability if you are involved in an accident. However, auto insurance will not protect you against the financial impact of mechanical breakdowns.
An extended warranty will protect you financially if your Car repair loan has a mechanical or electrical breakdown by covering the cost of expensive unforeseen repairs.
How Does the Claim Process Work?
Suppose your car breaks down and you have an extended warranty in place. In that case, the process of getting your vehicle repaired is very similar to getting repairs while your vehicle is under a manufacturer’s warranty.
Using your extended warranty is relatively straightforward, and you will usually be able to choose your own service facility or provider as long as you use a certified mechanic.
Your mechanic will begin by running diagnostic tests to determine the cause of the breakdown, and then they will contact your extended warranty provider.
When you purchase an extended auto warranty, you will usually get a card that you should give to your mechanic. The mechanic will furnish your provider with all the necessary details to process your claim. If you need to pay a deductible, you can do so once you get your car back from the mechanic.
An extended warranty will typically cover all the costs incurred when you need repairs – such as parts, labor, and taxes.
Choosing to purchase an extended warranty for your vehicle is a way to protect your investment.
Having an extended warranty will ensure your car retains its value, and it will also protect you against financial loss if you would not be able to afford the cost of expensive repairs out of pocket.
The peace of mind you get from an extended warranty is priceless – you never know when your car may break down or need an expensive part.
Expensive car repairs are one of the most common unexpected financial events. So, if you rely on your vehicle to get to and from work to earn an income, it’s best to make sure you’re protected.