Car Warranty Terms

Warranty Administrator
This is the company responsible for paying your automobile warranty claims. You should know, many times this is not the same company that you purchased the contract from. We recommend companies where you are dealing directly with the administrator, or a business where the contract is reinsured and managed by an "A" rated insurance firm. This way you are able to research their claims handling history before buying a warranty.

Extended Warranty
An auto extended warranty is a vehicle service contract between the automobile warranty company and you. If you buy a Toyota warranty for example, the company pays for repairs to your car that are covered by the contract. Extended automobile warranties are not to be confused with insurance policies. The service contract money is deposited in a "claims reserve account", which is insured in the event the administrator goes out of business. An car extended warranty is the most confusing and lucrative merchandise that auto dealers sell. The terminology is difficult, and if you don't read them carefully you may be in trouble. Some people erroneously believe they will get double the warranty coverage by waiting until the manufacturer warranty runs out to purchase their extended warranty. This is wrong, Auto extended warranties merely extend the original manufacturer's car warranty beyond the basic warranty period of time. They do not pay you double coverage. The earlier you purchase, the cheaper it is. Should you buy a warranty for your new car purchase? Repair shop labor hour rates are climbing, and today's vehicles have more pricey gizmos like DVD, power roofs, navigation and Bluetooth. When those expire you may pay thousands whether it's on a Toyota or Honda or Ford. It's recognized, these items will break and you may spend money. I choose to spend it on my warranty today at the most reduced price, than to spend thousands afterward on a BMW fix.

"Mechanical Breakdown" warranties vs. "Wear & Tear" car warranties
Standard wear and tear failures include: the graduated reduction in effective performance, valve grinding, worn rings, burned pistons, burned/worn valves/guides, and any covered part that has not broken. This includes seepage of seals and gaskets, fasteners and retainers (nuts, bolts, screws, clamps, brackets), and damage caused by overheating.

Is your car warranty repair is because of failure from a "Mechanical Breakdown" or is it "Wear & Tear"? You want warranty coverage for both! Nearly all auto warranty failures are wear and tear. So, you can bet your cheap "Mechanical Breakdown" warranty company will decide your particular warranty repair is wear and tear and reject your warranty claim right off the bat. Many times the extended warranty sold by automobile salesmen is a confusing mechanical breakdown insurance policy that often end up costing as much as $3,500! This is definitely not what you need. You need both "wear & tear" AND "mechanical breakdown" coverage in your warranty service contract. Numerous parts wear down, they do not break, so they are not covered by many mechanical breakdown warranties. People often complain that auto sales people lie to them and tell them "everything" is covered, giving a false sense of protection. Many auto dealer warranties require that you have them do every repairs. What if you can't get your car to the dealer? Before buying a vehicle service contract, carefully review what is covered and not covered to determine whether wear and tear claims are excluded from coverage. If you don't get a wear and tear type of warranty, you will get ripped off - I promise it.