What To Look For When Choosing A Warranty Plan

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Before you choose a warranty plan, it is important to know what things generally aren't covered under any plan. For instance, your car insurance covers things like exterior paint damage, collision damage and broken glass. You, as the consumer, are responsible for headlamps, taillights, bulbs, trim, moldings, upholstery, exhaust systems, tires, batteries, brake rotors, drums, struts, shock absorbers, oil changes, air filters and tune ups. It is possible for you to get "wear and tear" extended warranty coverage, which includes things like suspension or drive train components (transmission & axles). Parts like ball joints, camshafts, bearings and piston rings can cost you hundreds and are only covered under comprehensive wear and tear plans.

You may be wondering, "Do I need to purchase a warranty plan, or will I be covered by my car manufacturer's warranty?" In some cases, people have purchased two-year extended warranty coverage only to find that they had already been covered just fine by their manufacturer. According to the consumer site CarSmart.com, the best coverage is on high-end luxury sports cars, like Aston Martins, Lamborghinis, Ferraris and Rolls-Royces, which are covered until 999,999 miles.

At the next tier, you're covered for five years (or 60,000 miles) if you drive a Mitsubishi, Kia, Infiniti or Hyundai. You're covered four years (or 50,000) miles if you have an Acura, Audi, BMW, Buick, Cadillac, Hummer, Isuzu, Jaguar, Land Rover, Lexus, Lincoln, Maserati, Mazda, Mercedes, Mini, Porsche, Saab, Volkswagon or Volvo.

You may want to consider purchasing an additional warranty if you're rough on your mid-range vehicle or if you buy a lower range vehicle from Chevrolet, Chrysler, Dodge, Saturn, GMC, Honda, Jeep, Ford, Mercury, Nissan, Pontiac, Suzuki, Scion or Subaru (whose manufacturer warranties only cover 3 years or 36,000 miles.) If you drive a 2008 or later GM model, then you'll be covered for 100,000 miles or five years.

Sometimes when you purchase an automobile, you receive an "in-house" warranty plan. This means that you're entitled to some free maintenance and repairs, but only if you come back to the dealership to have the work done. Coverage varies significantly, but should cover major components like the engine, transmission, axles and drive train. It's a good idea to have the salesperson list what is and isn't covered for you before you purchase the extended warranty coverage. Sometimes dealers call their plans the "50/50 warranty," which means the dealer garage charges for parts and labor, then you pay 50% of the total invoice and the garage covers the other half. 50/50 warranties are considered to be a fair deal and the "in house" plans sometimes throw in routine oil changes as an added incentive, which may be a good deal if you live close by.

If you're buying a used car that costs less than $5,000, then is the warranty plan even worth it? At Warranty Direct, you can get an out-of-warranty plan on any vehicle over 36,000 miles that covers you four years (or 100,000 miles, whichever comes first). If you're buying a car so cheaply, then it's probably not worth your while to pay half that much for an automobile warranty (when you could have saved your money and your stress by just buying a slightly more expensive car with less mileage and a longer manufacturer's warranty). Beware of the cheap plans because they often advertise exceedingly low prices but essentially cover nothing. Some extended warranty plans to avoid include those offered by TheAutoClub.com, Continental Warranty, AaautoWarranty and SmartAutoWarranty.com, which do not offer wear and tear coverage and have garnered over 250 annual complaints.