Can I Buy an Extended Vehicle Protection Plan from My Dealer? [Questions and Answers]

What is an Extended Vehicle Protection Plan?

An extended vehicle protection plan is an optional service plan that drivers can purchase to help cover the cost of repairs to their vehicle’s major systems. These plans are available from both a third-party company and the vehicle’s manufacturer and typically begin after the expiration of the manufacturer’s warranty. Coverage may vary but typically includes major components like the transmission and engine, and may also include extras like towing, roadside assistance, and trip interruption protection. Most plans come with a deductible, which is an amount that the driver must pay out-of-pocket before the plan will cover the repair costs.

What are the Benefits of Purchasing an Extended Vehicle Protection Plan?

1. Extended coverage for common repairs and maintenance

An extended vehicle protection plan typically covers mechanical breakdowns and repairs that car insurance does not pay for. It does not cover routine maintenance items such as tires, brakes, wiper blades, air filters or oil changes. Some plans may include extras, such as towing, roadside assistance or trip interruption protection. The coverage is usually limited to newer cars, and most agreements do not cover routine maintenance. The extended warranty coverage moves beyond car insurance by taking care of damages due to normal use instead of just repairs caused by collisions, vandalism, theft, and acts of nature. The biggest benefit of an extended warranty is that it can save you money if your car needs a costly repair that’s covered under your contract.

2. Convenience of having a single plan for multiple vehicles

Purchasing an extended vehicle protection plan can help customers save money when it comes to car repairs. These plans provide reliable coverage, with many offering benefits like roadside assistance and rental car reimbursement. These perks can help cover the cost of renting a car should a repair take longer than expected, or provide towing services in the case of a breakdown. Moreover, many extended car warranties have sample contracts available online, and no vehicle inspections are required. This makes the process of obtaining an extended car warranty much simpler and more hassle-free. Furthermore, payment plans are often available, so customers can opt for affordable monthly payments instead of a huge upfront cost. With the right extended car warranty plan, customers can also enjoy trip interruption benefits and rental car coverage. All of these benefits can help save customers money and provide peace of mind.

3. Protection against major repairs and replacements

An extended vehicle protection plan is a type of warranty which covers repairs and replacements for mechanical problems with your car. These typically include items such as engine, transmission, airbags, suspension system, camshaft, head gasket, and catalytic converter, and may also include other types of repairs. The extended warranty also provides peace of mind in case of expensive repairs, as the warranty provider would pay for the repair after the deductible (if there is one) is paid.

Alternatively, car repair insurance can also cover the cost of repairs, but is typically limited to newer cars. Finally, rather than getting an extended warranty, it may be more cost effective to invest in a car with a higher predicted reliability rating, and then follow manufacturer recommendations for regular maintenance.

4. Coverage for common vehicle defects

Extended vehicle protection plans typically cover production defects, such as those related to the vehicle’s powertrain, stated components, and bumper-to-bumper coverage. Powertrain warranty covers the most critical parts of the engine, transmission, and drive axle. Stated component coverage protects only specifically listed car parts and systems, while bumper-to-bumper warranty covers almost all vehicle components, including steering, suspension, air conditioning and heating, and electronics. Manufacturer’s warranties usually provide three years/36,000 miles (whichever comes first) of bumper-to-bumper coverage and five years/60,000 of powertrain warranty protection. Extended warranties may also include extras, such as roadside assistance, towing, trip interruption reimbursement and rental car coverage.

5. Potential savings compared to going directly to a repair shop

Purchasing an extended vehicle protection plan can be an expensive option compared to going to a repair shop. Generally, extended warranty plans include an upfront deposit with monthly payments afterward. The price of a plan depends on the level of protection chosen, as well as the deductible for each repair. Deductibles range from $50 to a few hundred dollars, and some plans may have “per visit” or “per repair” deductibles.

In comparison, going to a repair shop may be more cost-effective, as you may be able to shop around and find a cheaper price for the necessary repairs. Additionally, services such as roadside assistance, towing services, and fuel deliveries may be available with some warranties, potentially saving you hundreds of dollars.

Ultimately, the best option for you will depend on your needs and budget. We recommend shopping around and comparing different options to find the best deal for your own situation.

6. Extended warranty coverage for powertrain, electrical, and cosmetic issues

An extended vehicle protection plan typically covers a variety of issues, such as repairs or replacements of parts due to failures related to normal wear and tear, manufacturing defects, and powertrain components such as the engine, transmission, drive axle, and other related components. Depending on the plan, it may also cover steering, suspension, air conditioning and heating, electronics, and other components. Some plans may also include other additional features such as towing, roadside assistance, or trip interruption protection.

7. Roadside assistance in case of emergencies

What type of roadside assistance is included with an extended vehicle protection plan? CARCHEX offers roadside assistance, towing services, fuel deliveries, a hassle-free claim process, claims paid directly to the repair shop, customized help from their agents, a network of more than 30,000 authorized mechanics, no vehicle inspections required, trip interruption benefits, and rental car coverage.

8. Coverage for towing and rental car expenses

An extended vehicle protection plan from Endurance will typically cover towing and rental car expenses related to the repair of a covered part. Roadside assistance, towing services, fuel deliveries, trip interruption benefits, and rental car coverage are all included in the plan. Endurance customers have access to the exclusive Endurance Mobile app, which allows them to request complimentary roadside assistance, towing, and rental car reimbursements. Customers also have the option of choosing from a variety of payment plans, ranging from a basic powertrain warranty as low as $79 a month to near factory-like coverage with a small list of exclusions.

9. Coverage for parts and labor for manufacturer defects

An extended vehicle protection plan provides coverage for parts and labor for manufacturer defects. This type of extended coverage can be purchased from nearly any authorized dealer and typically provides bumper-to-bumper coverage for three years or 36,000 miles (whichever comes first). It also offers powertrain warranty protection for up to five years or 60,000 miles. While the factory warranty covers any manufacturing faults or defects, the extended warranty covers any parts or labor associated with repairing those defects. Additionally, there are two types of coverage plans available, the named-component and exclusionary plans. The named-component plan covers only specifically named parts while the exclusionary plan covers nearly all components with the excluded parts spelled out. Finally, extended warranty companies may offer various levels of coverage such as powertrain, stated-component and bumper-to-bumper warranty.

10. Ability to choose a plan that best suits your needs

An extended vehicle protection plan can be a great way to protect yourself from unexpected repair costs and ensure that your vehicle remains in good condition. With so many plans available, it can be difficult to decide which one is best for you. To make the right choice, it is important to compare and contrast the different options available. Consider the length of coverage, deductibles, and coverage components. When comparing plans, make sure to factor in the cost of the plan as well as any additional fees or services that may be included. Additionally, if you are purchasing a plan from a dealership, be sure to inquire about any additional benefits that may be provided, such as service at any automaker dealership. Doing your research and comparing the available plans will help you choose the best plan for your needs.

How much does an extended vehicle protection plan cost?

The cost of an extended vehicle protection plan can vary widely depending on a variety of factors, such as the make, model, and age of your car, its reliability score, the number of miles driven, and the overall condition of the car. However, generally speaking, you can expect to pay somewhere in the range of $1,500 to $2,500 total for an extended warranty. For example, Endurance offers a basic powertrain warranty as low as just $79 a month, while CarShield costs $99 per month and up, though prices may vary by state, driver, and specific vehicle. To get the best rate possible, make sure to get car warranty quotes and compare.

Where and How to Buy an Extended Vehicle Protection Plan from a Dealer?

Step 1: Research available plans

Researching available plans from a dealer can be a daunting prospect, but it doesn’t have to be. Here’s a step-by-step guide to help you make an informed decision about the extended car warranty that’s right for you.

1. Ask questions. Get as much information as you can from any dealer offering extended car warranties. Try to find out what types of plans they offer, what type of coverage they provide, and what their prices and deductibles are.
2. Consider the pros and cons. Before you make a decision, make sure to weigh the benefits and drawbacks of each plan. Ask yourself if it’s worth the cost and if you can handle the deductible.
3. Compare plans. Take some time to compare the various plans offered by different dealers in order to find the one that best fits your needs and budget.
4. Research the company. Once you’ve narrowed it down to one or two plans, make sure to do some research on the company behind it. Find out how long they’ve been in business, what their customer service is like, and what their reputation is in the industry.
5. Ask about reimbursements. Find out how the company will reimburse you for repairs. Will you have to apply for repayment and wait for the warranty company to send the money, or will they work directly with the shop? That will determine which plan is best for you.

Following these steps should help you make an informed decision when it comes to your car warranty. With the right plan, you can rest assured that any unexpected repair costs won’t leave you with an unmanageable financial burden.

Step 2: Choose the right plan for your vehicle

Choosing the right plan from a dealer for your vehicle can be a daunting task. To make sure you pick the best plan for you, it’s important to do your research and consider all of your options. Here are some steps to help you make an informed decision:

1. Consider your finances, personal comfort level and the vehicle you’re buying.
2. Compare the prices of different plans, as well as their coverage and deductibles.
3. Identify plans offered by the vehicle’s original manufacturer and third-party extended warranty companies.
4. Speak with a vehicle protection plan specialist to get more information.
5. Examine dealership warranties, as they may offer more comprehensive coverage than other options, but they usually come at a higher cost.
6. Shop around and compare different warranties to get the best deal.
7. Check the status of your factory warranty, as it may have expired if the car is more than 6 years old.
8. Determine if you have your own in case of emergency vehicle repair fund or have the tendency to do vehicle maintenance on your own schedule.
9. Read the fine print and ask questions about any details you don’t understand.
10. Finally, look into the NEA Auto Buying Program for additional information and support.

Step 3: Calculate the cost benefit

Calculating the cost benefit of buying an extended vehicle protection plan from a dealer is an important step in making a smart and informed decision. Here are some tips to help you determine the value of such a plan:

1. Research the company offering the warranty: Find out how the company will reimburse you for repairs. Will you have to apply for repayment and wait for the warranty company to send the money, or will they work directly with the shop, so you’ll never have to pay more out-of-pocket than your deductible? Knowing this ahead of time will help you decide if the warranty is worth the cost.
2. Factor in the odds: Consider if the odds are in your favor to make out like a bandit with the extended warranty. Insurance companies that offer and back these warranties may raise the price if they think they will make a profit.
3. Count the cost: Don’t buy any extended warranties until you have considered the cost. Calculate the amount of money you would save if you “self-insure” and put it into a virtual account for when a product actually does break.
4. Shop around: When your car approaches its third birthday, look into the extended warranty and shop around for the best price from the comfort of your home.
5. Consider interest: Consider if you will be paying interest on something you won’t use for years. Rolling the cost into your monthly payment may be easier but it may not be the smartest choice in the long run.

An example of calculating the cost benefit of buying an extended vehicle protection plan from a dealer:

Let’s say you are considering buying an extended warranty for a new car. You research the company offering the warranty and factor in the odds. Then you decide to “self-insure” and put $2,000 into a virtual account for when the product breaks. As your car approaches its third birthday, you shop around for the best price from the comfort of your home and find that you can get the same extended warranty for $1,000. In this case, you would be getting the same coverage for half of the cost and “saving” $1,000 by self-insuring.

Step 4: Make sure the plan covers exactly what you need

Step 1: Consider your finances, financial comfort level and the vehicle you’re buying.

Step 2: Research different extended warranty plans, the coverage area of the provider, their customer service, and the claims process.

Step 3: Understand the claims process and make sure it’s easy for you to follow and that you’re comfortable with.

Step 4: Find out how the company will reimburse you for repairs and make sure you don’t have to pay more out-of-pocket than your deductible.

Step 5: Read the agreement’s fine print carefully to make sure the extended warranty covers exactly what you need it to cover.

Step 6: Consider if you need roadside assistance and if it’s a separate purchase.

Step 7: Talk through your questions with a representative from your extended warranty provider.

Step 5: Read customer reviews and ratings

Finding out what customers think about an extended vehicle protection plan from a dealer is a great way to make sure you’re making an informed decision. Here’s a step-by-step guide to do so:

1. Read online reviews: Start by searching online for customer reviews. Look for both positive and negative reviews, as well as customer testimonials to get an idea of the company’s customer service and satisfaction levels.
2. Read the FAQs: Go to the company’s website and read through the frequently asked questions. This should give you an idea of the coverage terms and added benefits.
3. Talk to others who have purchased the plan: Ask friends, family, or colleagues who have purchased the plan from the same dealer. They should be able to provide honest feedback on their experience.
4. Check the cost: Compare the cost of different plans from different dealers to get an idea of the pricing.
5. Read the customer service scores: Read through the customer service scores given by our experts. This will provide an indication of the responsiveness and helpfulness of the customer service team.

By following these steps, you can get a better understanding of the extended vehicle protection plan from a dealer and make an informed decision.

Step 6: Check if the plan is insured by the dealer or a third party

When purchasing an extended car warranty from a dealer, it is important to check if the plan is insured by the dealer or a third-party. The process of doing this is as follows:

1. Familiarize yourself with state laws governing extended car warranties. In some states, companies administering car warranties must register with the state and insure their contracts each year. Companies with a net worth greater than $100 million may skip the insurance requirement.
2. Read the contract thoroughly. The contract should specify which company insures the warranty and if the policy is not insured. The contract should also explain how to get approval for repairs, if there is a deductible for service, any exclusions to coverage and if the plan covers consequential damages or preexisting conditions.
3. Ask questions. If you are unsure, it is important to ask the dealer questions about the policy and coverage.
4. Contact the insurance company. To ensure the warranty is legit, you can also contact the insurance company directly to inquire about the policy and coverage.

Following these steps can help you to determine if the extended car warranty you are purchasing is insured by the dealer or a third-party. By taking the time to research and ask questions, you can make an informed decision about the plan that is right for you and your budget.

Step 7: Check if the plan has any limitations or conditions

When deciding whether or not to purchase an extended vehicle protection plan, it is important to understand the limitations and conditions of the plan. Depending on where you live, the regulations and laws governing extended warranties may differ. For example, in Maine, service contracts must be backed by an insurance policy and must disclose the name and address of the insurance company. Colorado has no laws that specifically govern service contracts beyond exempting them from being considered insurance.

Other common conditions of extended warranties include a refund period of up to 10 days (20 days if the contract is mailed to you), which must include a full refund if no claims have been made. The contract must also explain how to get approval for repairs, and whether there is a deductible for service. Additionally, the contract must specify any exclusions to coverage, as well as any non-original parts that may be used in repairs and whether the plan covers consequential damages. It must also inform the customer if the policy is not insured.

In contrast, companies with a net worth greater than $100 million can skip the insurance requirement. Furthermore, companies violating the laws may be fined up to $15,000 per violation, be forced to stop selling contracts, and be ordered to pay restitution to anyone wronged.

Overall, it is important to understand the limitations and conditions of an extended vehicle protection plan to ensure that it meets your needs and budget.

Step 8: Ask for proof of coverage

If you are considering purchasing an extended vehicle protection plan from a dealer, there are several steps you should take to verify the coverage.

First, check the coverage area of the provider, their customer service track record, and the claims process. It’s essential to ensure you are working with a reliable provider in case you need to file a claim.

Next, make sure you understand the claims process and that it is easy to understand. You should also ensure that you are comfortable with the terms of the plan.

Third, research how the company will reimburse you for repairs and if you will have to pay for the repairs upfront and wait for reimbursement. If so, you might be left with an unpaid credit card bill. The best plans will send the money straight to the shop and take you out of the payment loop.

Fourth, you should find out if there is a cancellation process and if you can return the contract for a refund. Most dealerships will require you to fill out a physical cancellation form that you can either mail in or bring straight to the dealership.

By taking these steps, you can be confident that you have found the right extended vehicle protection plan to protect your investment in a used car.

Step 9: Make sure the plan is valid in your state

1. First, check to see if your state has adopted the Model Act. This document is meant to provide a relatively uniform set of laws across states that adopt it.
2. If the company administering the service contract has a high net-worth, they may not need to separately guarantee the contracts.
3. The contract should prominently disclose conditions, exemptions, restrictions, and other important details about the claims process, transferring the contract if you sell the car, and how and if the administration company can cancel the contract.
4. The company should also tell you how the contracts are guaranteed, including the name of the company insuring them if there is one.
5. It should also be noted that no one, including the bank you get a loan from to buy the car, can require you to buy an extended warranty as a condition of the loan or the purchase of the car.
6. Lastly, penalties for companies that break the law vary from state to state, ranging from fines to more serious charges if a company breaks certain parts of the service contract laws.

Step 10: Read and understand each step in the claims process

Step 1: Read the extended car warranty contract carefully and make sure you understand all of the terms and conditions.

Step 2: Make sure your car is properly maintained and all scheduled maintenance is up to date to ensure that coverage is not denied.

Step 3: Contact your provider and get approval for the repair.

Step 4: If the repair is approved, make sure you have the necessary documentation (receipts, invoices, etc.) that will be needed to file the claim.

Step 5: File the claim with the provider and provide them with the necessary documentation of the repair.

Step 6: If the claim is denied, check to see if there is a state law that will provide additional protection. In Pennsylvania, for example, companies providing extended warranties must insure their contracts to guarantee they can pay for claims. Additionally, the contract must disclose any exclusions to coverage.

Step 7: If the warranty provider still denies the claim, you may need to appeal the decision. Make sure you understand the appeals process and what is required to make your case.

Step 8: If you are still not satisfied with the outcome, contact the relevant state authorities. In Pennsylvania, companies breaking the law can be fined up to $15,000 and ordered to pay restitution to anyone wronged.