Navigating Extended Service Agreements (aka Extended Warranties)
Understanding Extended Service Plans
Written By Trevor Skoro
The last thing anyone needs is an unexpected repair that can cost hundreds or even thousands of dollars, emptying your emergency savings. Car repairs are an unexpected expense that can put any monthly budget into a tailspin.
One way to avoid the unexpected expenses of car repairs is to extend the life of your car with an extended service agreement (commonly known as an extended “warranty”), which can pay for itself with just one major repair.
In this blog we’ll cover a few things you should know about these types of plans, starting by working with someone you trust to help you know how to best cover your vehicle. At Auto House, we’re always available to answer any questions you may have about extended service agreements, or anything else related to purchasing a vehicle.
*Ring* Why are we trying to reach you about your extended warranty?
Wait! Don’t leave yet! We know extended warranties have a bad reputation and trust us, when we get those robocalls we also roll our eyes and hang up on them.
Those calls are a scam and the FCC says you shouldn’t talk to them. Typically, they are using the call to try and get personal information out of people who answer. You are wise to just hang up (and call Auto House).
Extended Service Plans – The Basics
Extended service plans (sometimes called extended protection plans or an extended “warranty”) extend the coverage on your vehicle longer than the factory warranty. This investment in your vehicle can keep your car running for an additional 50,000 to 100,000 miles after the factory warranty, without throwing your budget for a loop.
Not sure it’s right for you? Not all extended service agreements are created equal. Find one that can be customized to fit your budget, car and car ownership style. Maybe you drive a lot, or not very much, either way, we can help you find a plan to help you maximize your budget and extended coverage.
What does an extended service plan cover?
It’s much easier to tell you what isn’t covered than what is, because extended service plans can cover just about everything except regular maintenance and wear and tear on parts like tires, depending on your specific warranty.
What isn’t covered?
- Damage from an accident
- Normal wear and tear (tires, brakes, other maintenance)
- Damage from extreme weather events (termed “Acts of God” in insurance lingo)
If you were out of town and a mechanical failure happened to your vehicle, then your repairs would still be taken care of, as long as you took your car to a certified mechanic.
How much does an extended service agreement cost?
The costs of these plans change based on several variables like the make, model and year of the vehicle to be covered. Any add-ons you may need, like covering a large or lifted truck, after-market upgrades, four-wheel drive or using the vehicle for commercial use will add to the price.
The age of your car and the length of the coverage will also be reflected in the price. Any one of our Auto House Consultants can give you a quote on coverage via phone, email or text in just a few minutes.
When is the best time to buy an extended service agreement?
The best time to purchase an extended service plan is when you buy your car. At Auto House we can roll the cost of the plan into the financing, so you won’t need to pay cash out of pocket to cover it.
The second-best time to purchase an extended service plan is now, especially if your manufacturer’s warranty is about to expire. Adding an extended service plan before the manufacturer’s warranty expires means the car won’t need an inspection before being covered (saving you the inspection cost).
If the manufacturer’s warranty has expired, then your car will need an inspection by a certified mechanic before you purchase your extended service agreement. We can do that here at Auto House or you can take it to your favorite mechanic.
You can purchase an extended service plan until your car is about 20 years old or reaches about 125,000 miles.
In These Unprecedented Times
We have never experienced a shortage of vehicles like we are right now. Car manufacturers are experiencing the same supply chain problems as every other industry and it’s impacting the new and used car markets. You may make more on a trade-in right now, but you might also pay more on a new purchase.
Consider purchasing an extended service plan as an investment to extend the security in your vehicle. This will save you unexpected repair costs and keep your car running while you wait out this market. How great would it be to drive another 50,000 or 100,000 miles without worry?
A couple more things to keep in mind when shopping for extended service plans
- Check the cost of the deductible. (At Auto House if you purchase your plan from us and use our service center for repairs, we waive your deductible.)
- Make sure the power train is included in the extended service agreement.
The upfront cost of a plan may feel like a lot, but one major repair and it’s paid for itself! Isn’t it worth it for the peace of mind?
Shop around to find the best deal. You can call or text your Auto House consultant and get a quote ASAP.