When you start doing your research in anticipation of buying extended vehicle coverage, you have to dig a bit deeper than just a single, broad explanation of legal terms and such. The fact is, the extended auto warranties in your state may be regulated and controlled in ways quite different than in a neighboring state. If you only have time to read one article (you have to leave in five minutes and the subject just came up), then it should at least be one that covers the specifics for your home state. Auto insurance is not yet on anyone’s short list for nationalization, so there will not be one-size-fits-all federal oversight of these warranties, at least not very soon.

A growing number of states require that companies selling vehicle protection products (like theft deterrents) and services (like extended warranties) have to be registered with state authorities. Some states oversee these through their insurance commissioners, others through their consumer protection agencies and still others with a combination of agencies. This, again, differs both among states and over time, as there have been some wide-ranging changes to how state governments deal with insurance and insurance-related businesses. On the other hand, some states have determined that extended vehicle warranties are not insurance, but pre-paid service plans. Whatever they are called in your state, you need to find out how they are regulated and how best to compare their offers.

Basic consumer protection

Even when the extended warranty is considered insurance (which is less and less often), all of the other consumer protection regulations in your state will still apply to the company selling it. That is, you already have the protection of fraud and false advertising laws, so regulators do not need to write additional rules about these issues. Your state government is primarily concerned with ensuring that the firm can pay its claims, so the company may be required to provide financial data, maintain a certain net worth, post a bond and otherwise establish their bona fides.

In addition to disclosing pertinent information about the firm’s assets and operations, the warranty companies may also have to show their various warranty contracts to the state regulators. This step will guarantee that the warranties sold in your state contain the provisions, definitions, terms and information as determined and legislated by your state lawmakers. Typically, the firms that pass scrutiny will be listed with the state’s Attorney General and/or consumer affairs agency. These lists are often available on the state agency Web sites.

All over the nation

Some states that have taken the foregoing approach, to greater or lesser degrees, are Ohio, Texas, Georgia, Tennessee, Michigan, Missouri, Alabama, Maryland, Oregon, Massachusetts, New Jersey, California, Minnesota, Mississippi and Florida. Although registration requirements definitely vary from state to state, you can expect that companies listed by the consumer agency or attorney general have been deemed trustworthy. You will also be given information as to what that means in your particular state, from any security bonds required to the financial status of the warranty firms. In addition, you will get help with the often-confusing vocabulary used by both lawmakers and extended warranty companies, since similar terms may be defined quite differently by the various states.

Terms and types

There are some terms, however, that mean pretty the same thing in Arizona as they do in Alaska, and they are the ones that describe the different warranty types. Extended warranties differ greatly among these categories, and you need to know what is what if you are to make an informed buying decision. In most every state, a range of warranty types can be purchased (or offered with vehicles at the point of sale), but the main three are bumper-to-bumper, component and powertrain contracts.

Bumper-to-bumper coverage: These warranties are sometimes known as new car warranties, wrap programs or exclusionary policies, and are the most comprehensive policies that you can purchase. The exclusionary term is used because these vehicle policies cover so many parts that it is easier to list items that are specifically excluded than all the ones that are included. Bumper-to-bumper policies often include such niceties as roadside assistance, reimbursement for travel interruptions, wear and tear, audio equipment coverage and seals/gaskets. No warranty covers every single component of your vehicle. You should review each prospective plan in detail so you know the exact coverage.

Component coverage: These contracts are often referred to as inclusionary policies, as they are extended warranties covering most major parts on your vehicle. Per the name, the policies list only the components covered by the warranty. If the component is listed, it is covered, and the plan can also offer other benefits and options.

Powertrain coverage: This is similar to catastrophic health insurance, in that these warranties cover your vehicle’s major powertrain parts. This means transmission, engine, drive shaft and drive axles. It is often possible to extend coverage to include other parts and components. A powertrain warranty covers the major expenses, and is a good value for high-mileage vehicles.

Before you buy, read every word of the policies you are considering, no matter how long it takes. If you find it tough going, get some help (but not from the salesperson). Make sure you understand extended auto warranties in your state, and find out what the procedure is if you run into a problem with the warranty provider. If you do your due diligence and get the right information for where you live, you will find it much easier to understand, compare and buy what you need.

Whether you have a car, truck, SUV, or van we can find the best possible extended auto warranty for your money. Do not let your limited warranty expire without shopping for continued coverage first. Visit 5starwarranty.com online today for more information.

After a house, the biggest purchase you typically will make in your life will be your cars or trucks. This purchase decision has many facets to it, too. You have to choose make and model, of course, but that is only the beginning. Color, year and options like fancy rims, sun- and moon-roofs, navigation system and so forth all come into consideration when you are choosing the vehicle you want. Then there is that famous last question from the salesperson or finance manager as you take pen in hand to sign on the dotted line - something like, Do you want an extended auto warranty?

Yes? No? Maybe? Do you really know? The time to figure this out is not when you are in the dealership with pen in hand, but ahead of time when you can give it thoughtful consideration, so take a moment now and find out how to make that decision.

Typical warranties

Auto manufacturers offer extended warranties themselves, although not every car maker underwrites and manages its own policies. If you are buying a new car in most dealerships, the seller will be ready, willing and able to extend the normal warranty for an additional period of time (and/or number of miles). The price will range from a few hundred to several thousand dollars, from entry-level packages that cover the standard power train of engine and transmission to premium plans that add the air conditioning, suspension, audio components and nearly everything else.

You can also buy a third-party policy, one that is not affiliated with the maker or seller of the car, at both the time of purchase and any time after that. These are generally the same as manufacturer plans, except you may find more flexibility in assembling a customized package that truly meets your needs and fits your budget. If you travel on business at times and cannot do without rental car reimbursement and towing if you have a breakdown, you can make sure to get that particular coverage when choosing your plan.

Similarities among plans

Whether you buy an extended warranty at the time of purchase or later, and from a carmaker’s dealership or a separate third-party firm, there are certain things you will always find. One is a deductible. In addition to buying the extended coverage, you will typically have a deductible to pay, although there are some new cars that come with no-deductible extended warranties. The point is, you will pay for the coverage one way or another, either as part of the car’s (higher) price or as an add-on.

Of course, you can choose plans with lower or higher deductibles, which affect the plan price as they do with accident coverage policies. You can pay top dollar for the plan and have no deductible at all, pay a bit more for a $50 deductible, or pay less and get a $100 deductible (about average) or even higher. You are also able to buy extended warranties on both new and used cars, trucks and vans, although the age of the vehicle may be restricted to a certain number of years and/or miles. Some warranty firms may exclude particularly rare or exotic autos.

Now, about that need

You have a basic understanding of the warranty, but the question remains - how do you know you need that extended warranty? The research you did on the car you bought (you did do research, right?) should have given you an idea of how it fares on repairs, weathers your Minnesota winters or Arizona summers, survives impacts and stands up to your own unique kind of use. This must factor in heavily, of course. However, do you need an extended warranty on your car if it has a 10-year/100,000-mile plan from a maker like Hyundai? Isn’t that coverage enough?

Actually, the Hyundai plan, like the new GM warranties (5-year/100,000-mile), only covers the major powertrain parts. That leaves a lot uncovered, and does not begin to take care of towing, rental cars, travel reimbursement and many other things that even the basic third-party extended warranties offer. In addition, manufacturer packages typically control the process in the important ways, namely, telling you what repair shop you will use (the dealership about 90% of the time), the parts you will get, the timetable for the work and so forth. Get in an accident when covered by one of these plans and you are out of the driver’s seat in more ways than one. It is the third-party specialty firms that are in the business of putting you back behind the wheel and in control of your car.

Your own personal formula

You need to look at the whole picture. If you have a manufacturer warranty now, or are buying a car that will have one, then you need to know what it covers so you can plan more precisely what you need to add in the way of additional (extended) coverage. If you are buying new, you might consider the prepaid scheduled maintenance plans now being offered by many carmakers.

So, do you need an extended warranty on your car? Many, many people do, and they cannot buy one if they wait until they need it. Neither can you. You should be rigorously honest with yourself about your own vehicular history, driving style and proneness to accidents or mishaps. You also need to understand what you are paying for and why.

Taken together, all these factors will result in your own personal formula for making this decision. Never answer a car salesperson with an automatic “yes” to this question. Rather, learn enough to say, “This is what I need…” - and then set about making your best deal for your true needs, as long as you get the right answers to your good questions.

Whether you have a car, truck, SUV, or van we can find the best possible extended car warranty for your money. Do not let your limited warranty expire without shopping for continued coverage first. Visit 5starwarranty.com online today for more information.