Extended warranty companies advertise   “you will never have to pay for auto repair again”. I live on the claims side of extended warranties for auto repair. The picture looks a little different from our side. Recently I have seen extended warranty companies really tighten their belt on claims. This is understandable as the economy shows little partiality.  I recently surveyed for a customer an extended warranty  that was recommended by AAA Motor Club. Here are some things I found written into their contract:

• An option to provide the part themselves instead of paying the shop for theirs – we like to say this is like getting your steak at Wal-mart, taking it to a fine steak house and ask them to cook it for you at a discount.
• An option to provide used parts for the repair at their choice not yours
• A breakdown has to occur – not because a trained technician sees the eminent failure
• They do not pay for items that wear out even if they are listed as covered
• A limit of what they will pay for parts and labor – leaving you to pay the balance
• Maintenance must be followed and receipts kept

If you follow the maintenance recommendations that you should be doing anyway, the chance of you having a breakdown will always be in their favor.  Their can be some positives to having an extended warranty on your car just don’t buy into the ads that say you will never pay for auto repair again. You will- even with an extended warranty.  A wise friend once told me – remember   “contracts are written in favor of those who write them”.

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