How to Buy an Auto Warranty

Purchasing an extended auto warranty is a way to guarantee peace of mind about the durability of your car or truck. Dealers frequently offer auto warranties with new and used cars as a way to bring in customers and convince them that they are getting a car the dealer stands behind. However, there are a lot of pitfalls you need to avoid when purchasing a warranty for your car.

Instructions

1. Read the warranty agreement carefully. Check for named components, because extended auto warranties typically do not cover the car bumper to bumper.

2. Examine the wear and tear clause and the exclusion clause. Many new and used car warranties specifically state that they do not cover wear and tear on many different components.

3. Check the fuel clause. Frequently an auto warranty will not cover repairs that are the result of using poor quality fuel, which can mean just about anything.

4. Watch for the phrase "limited warranty" or one similar. A limited new or used auto warranty is just that: limited. There may not be many repairs that are covered, and you could be wasting your money.

5. Shop around for an extended auto warranty somewhere other than the dealer. Research warranty sellers online or ask your mechanic if he knows of a reputable warranty agent.

6. Consider not purchasing an extended auto warranty at all. Save against future repairs instead. Establish a savings account or certificate of deposit solely for the purpose of auto repairs. Instead of spending money up front that may or may not help you in the future, you can earn interest and improve your credit--it is a win-win situation!

Tips & Warnings

• Researching online can save you a lot of time and money when the time comes to purchasing an extended auto warranty.

• Remember that certain vehicles do require specific grades of fuel. Check your owner's manual to find out what kind of fuel your car needs. If you use the wrong grade of fuel, you will rightfully void your auto warranty.