Auto Loan Factory

Aftermarket Car Warranty
By Richard Romando

When you buy a new car from the dealer, the car is covered by a factory warranty. This warranty will cover the repair cost of your car for a limited amount of time or a predetermined mileage, whichever comes first. After the original factory warranty expires, you may choose to purchase an extended warranty. Any form of warranty that is provided to you by someone else other than the original factory is considered an aftermarket car warranty.

Warranties can be bought through the dealer, or from a third-party company. Buying the warranty directly from the dealer is the safest route because they are likely to be there in the future to uphold the contract. However, warranties from dealers are far more expensive, and sometimes provide less coverage than warranties from third-party companies. Regardless of where you buy your warranty coverage, make sure you do your research first. Check with the Better Business Bureau, as well as other rating publications. You should make sure that you are dealing with an A+-rated company before you deal with them.

One thing you will not have to worry about if you buy a warranty from a car dealership is the stability. Some third-party companies are members of under-funded, risk-retention groups instead of true property and casualty insurance groups. Dealing with this type of company can result in the possibility of you losing your coverage if the company goes out of business. By dealing with the dealer, you can be sure that this will not happen.

The only problem with buying from the dealer is the mark-up cost. Some have observed a markup as high as $800-$1,200 with less coverage. However, by dealing with the dealer, you are paying the extra money for the convenience and security. Most of the time, the dealer is only the middleman in the transaction; they will usually subcontract their warranty purchases to another company. They will make a great deal of profit from the sale of warranties. Regardless of where you buy your warranty, look over the contract very carefully, knowing everything about the stipulations of the contract, and what types of actions will void it.

Auto Warranty provides detailed information on Auto Warranty, New Car Warranty, Extended Auto Warranty, Used Car Warranty and more. Auto Warranty is affiliated with Extended Auto Warranty.

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