Warranties can be one of the most complicated and confusing things you will buy. When you are buying a warranty or buying something that comes with a warranty, it can be hard to know what coverage you are getting, how to use it, and whether it’s worth the money.
Car Warranties
What is it? Manufacturers’ warranties on cars are complicated and detailed, and with good reason. A car is a very complex thing, and with so many different moving parts, electronic components, and computers involved, there’s a lot that can go wrong.
What does it cover? because cars are so complex, warranties have different coverage for different systems. Nearly all warranties have an initial coverage period that protects your whole car. 3 years or 36,000 miles is a common coverage period for this type of warranty. After the whole-car warranty expires, you will usually have a longer warranty that still covers the drive train. This includes the engine, transmission, and a few other select components.
How does it work? Because we are now driving our cars more than the industry standard of 12,000 miles a year, your coverage will probably end due to the mileage limit rather than the time limit, so pay more attention to that.
Make sure you understand how your warranty works. In many cases, you will have to have repairs done at a dealership. You will also void your warranty if you use your car for non-typical uses, such as off-roading or if you tow more than the recommended weight. In addition, beware of using generic or off-brand parts in your vehicle, which could also void the warranty on that system. Even small modifications that aren’t recommended by the manufacturers, such as getting a lift kit, can change how your warranty works.
Extended Car Warranties
What is it? An extended car warranty is designed to pay for repairs and replacements that are needed after your initial warranty period expires.
What does it cover? Extended warranty plans can vary in coverage. Powertrain plans are cheaper and cover your engine, transmission, and other similar parts. These can be the most expensive repairs on a vehicle. Other plans are more comprehensive, and of course, more expensive. Many people find they are grateful to have a warranty and the peace of mind it brings. Other people pay for them for years and never use them. The average car on the road today is 12 years old, so vehicles last a long time
Be cautious when purchasing an extended car warranty, and never purchase from a phone call. Extended car warranty phone calls are now the most common scam in the country. Always buy from a reputable source. Many used car sales lots offer their own warranty, as do manufacturers. For example, the Buick extended warranty offers several different options and levels of coverage. These may or may not be a better deal than other reputable warranty companies.
How does it work? When you first purchase an extended car warranty, you may pay an up-front cost that could be in the thousands of dollars range. Or you could pay a smaller monthly amount that allows you to remain under coverage. In addition, at the time of any claims, you will also pay a service fee or deductible before your warranty kicks in and pays the rest.
Home Warranties
What is it? A home warranty is a contract that you purchase to help ease the burden of repairs on your home. They are often purchased by sellers before selling a house or by new home buyers, but they can be purchased at other times.
A home warranty charges you a small amount each month, sometimes under $50, and covers your home’s systems, appliances, or both. Home systems include things like your electrical, plumbing, HVAC, and septic or sewer lines. Appliances cover all your kitchen appliances plus things like garage door openers.
What does it cover? The warranty repairs or replaces covered items as long as the damage was caused by wear and tear or failure due to the normal lifespan of the item. It doesn’t cover things like storm damage or misuse, and it doesn’t cover anything already covered by a manufacturer’s warranty.
When you purchase a new home, it is usually covered by a manufacturer’s warranty by the builder, which may last a year or two or more. This should render a home warranty unneeded for that length of time. Brand-new appliances should also be covered for a set period of time.
How does it work? When you have a home warranty and need something repaired, you will call your warranty company first, and they will contact a contractor. You will pay a service fee to the warranty company, usually around $100 or so, and the rest of the covered repair will be paid by the warranty company. When you are using a home warranty you usually cannot choose your own repair person or contractor.
Product Warranties
Products such as computers, tablets, phones, and other devices will come with a manufacturer’s warranty, which will cover the product for a limited amount of time. In addition, you can purchase an extended product warranty. These are usually sold by the manufacturer or the seller. For example, if you buy a product from a chain store, that store will usually offer an extended warranty from a third-party company. For most people and products, these warranties are not a benefit and you will never use them. For a few expensive products that are at greater risk of damage or cost more to repair, such as laptop computers, a warranty can be a wise purchase.
