In fact, if you’re buying a low mileage car, like a fleet car or tester, then the car is probably still under the manufacturer’s warranty. Before you begin negotiating for a dealer warranty on that car, ask for a copy of the manufacturer’s warranty. You may be able to use that warranty as your basis and have the dealer build on that. You might ask, for example, to have coverage extended an additional number of miles. Even if you aren’t able to get a warranty extension on all of your car’s systems, you may be able to significantly improve the remaining manufacturer’s warranty.

Next, find out if your dealer participates in a larger warranty protection group. If a larger group is underwriting the warranty, find out who is doing the underwriting and check out their reputation. The Better Business Bureau is a good place to start to find out if any complaints have been filed against the company. Call up the company as well and ask for more information about the policy. Any reputable company will have no problem giving you information on warranty terms before you buy. Be wary of any company that hesitates when it comes to providing you with details and complete information about the warranty’s terms.

In addition, it’s important to note that a warranty is only as good as the company standing behind it. These days, with dealerships going under every day, having a warranty with a larger underwriting company – instead of an individual dealer – may be a good bet. If you do have a dealer’s warranty, you can also ask your dealer what provisions have been made to honor warranties if the dealership closes, merges or fails.

Beyond this, begin the warranty negotiations just as you would any negotiations – by knowing what you must have, what you’d like to have and where you’re willing to compromise. Start by asking for more than you have to have so you have some room to compromise. If the dealership provides service, you might ask about throwing in oil changes as part of the warranty. It also helps to know the dollar value of the things you’re asking for. It wouldn’t make sense, for example, for a dealer to agree to a warranty worth $5,000 on a $10,000 car – your lack of knowledge may even weaken your negotiation position, so do your homework ahead of time.

Above all, know that you have an ace in the hole – you can walk away if your needs aren’t met. You have to fall in love with the whole deal – not just the car – and the warranty should certainly be considered to be part of that package.

Warranty Direct has a good reputation among what is – to put it bluntly – a bad lot. In the BBB database, they have eighteen registered complaints and all are marked as resolved by the BBB – not a bad record to start with.

In addition, Warranty Direct is an established company with over twenty five years in business. They’ve been named one of the top 200 companies in America by Forbes magazine – which is certainly no small feat. This is a company that has been here for a while and will still be there when you need service.

They stand in opposition to the host of companies that are in business to sell and only pay lip service to customer support. Warranty Direct’s warranties are backed by two of the best rated insurance companies in the nation. While this provides peace of mind, there’s an even more important quality this brings to the table – the stability of the administrator. They are the ones, after all, who are going to pay for repairs. Warranty Direct administers these warranties and they’re so confident in their products that they offer a money back guarantee if you aren’t satisfied.

As another mark of how above average Warranty Direct is, you can ask for a copy of the terms and conditions of their policies before you buy. This shows good faith on their part and allows you to do a comparison to any other coverage you’re looking at.

They’ve also gone the extra mile to translate the policy language into plain, straight forward text that’s easily understood. This is another red flag at many other disreputable companies – they hide the details of what they will and will not pay for in fine print that’s so confusing that even the experts at the BBB can’t make sense of it.

There are some other details of the Warranty Direct policies that are worth noting, including roadside assistance. This includes a tow, a tire change, a battery jump, or mechanical first-aid – all of which are covered under a Warranty Direct plan. Know that this isn’t a reimbursement plan, nor is it one that’s tied to covered repairs – it’s a true roadside assistance plan with nationwide coverage.

In addition, Warranty Direct will let you use the repair shop of your choice, whether it’s a dealer, a national chain or a local mechanic. The claim will be paid quickly over the phone with a corporate credit card. That’s it. You’ll be responsible for any deductible, if there is one, but otherwise, Warranty Direct will cover parts, labor and even applicable sales tax. You won’t need to put down any money, and there’s no limit on the number of claims you can make.

Overall, Warranty Direct is a reputable company that’s large enough to have had a few registered complaints. But it’s a good enough company that those complaints are in the minority and have been successfully dealt with. This is a company that deserves your extended auto warranty business.

Next, you have to look at your needs. Say you have a low mileage car that’s currently under a manufacturer’s warranty. How much do you rely on your car? Is it vital to your business? Will substantial time in a repair shop be a real problem or a minor hassle? If it’s the former, an extended warranty will certainly be a sound investment; if not, look at the replacement costs versus the repair costs or the costs of buying an extended warranty.

Once you know you have a car that can be covered and you know what kind of coverage you need, you’ll be faced with the task of finding a company to provide the extended warranty coverage. And frankly, this is where it can get dicey. There are a lot of companies out there that are, quite frankly, crooks. Just check the records of state attorneys general and the Better Business Bureau – plenty of extended auto warranty companies are currently being investigated for various types of fraud.

Actually, that’s not a bad place to start – call up the BBB and ask about a company you’ve heard of or one that you’re thinking of dealing with. They’ll be upfront about who has what complaints and what kind of reputation.

But a reputation – good or bad – isn’t enough. How do you feel when you call them? There are warning signs you should be aware of, including high pressure sales tactics, repeatedly asking for credit card information to “hold this price,” or a refusal to send you a copy of the terms of a policy before you commit. The latter one is a big one. A reputable company will be glad to send you complete terms for comparisons before you buy. If a company won’t do this, don’t deal with them.

Once you have the policies in front of you, read through the terms of each policy. Is the language plain and easy to understand? Check out the claims procedures. Are they simple and straightforward? Is there a deductible you’ll have to pay and is it reasonable and fair? If the policy is written so that you can’t figure all this out easily and on your own, take your business elsewhere.

Finally, check with the local repair shops. Which companies have they done business with and had a good experience with before? Knowing how they treat customers at both ends of the process will give you a good idea about the overall business practices of the company.

And finally, as with all contracts, resist any high pressure sales and sign nothing until you fully understand of all the details, terms and procedures of the contract. No reputable company will ask for your money before you’re happy and contented – keep that in mind and you’re sure to get the best value for your money.

First off, did the provider contact you or did you contact them? The most problematic companies in this industry are ones tied up with telemarketing and mail scams. Failure to abide by the federal “do not call” list and misleading mailing are at the heart of the many class action suits currently plaguing the less-than-sound members of this industry.

Also, think about how they’re treating you. Do you feel pressured to make a decision right away, especially if you’re being told that the coverage “won’t last?” This is the mark of a company that’s more interested in selling than in supporting. And, as with any insurance policy, you’re buying support. Being too pushy on the front end can mean that there will be problems on the back end.

Next, ask if the people you’re talking to are brokers or administrators. This is an important distinction. A broker will sell you a policy and then walk away; leaving you to deal with people you’ve never seen and know nothing about. Instead, you want an administrator who will actually oversee the policy they’re trying to sell you. You want the same relationship you’re used to with a traditional insurance agent – and you won’t get that from a broker.

In addition, be very wary if they won’t give you details about the coverage before you buy. If they speak exhaustively about need or bad outcomes, but little about what they’ll actually do in the event of a claim, ask even more questions. If they won’t answer, know that you aren’t dealing with a reputable company.

Instead, request a copy of the terms of the warranty to be sent to you before you sign on the dotted line. Any reputable underwriter will be glad to send you the exact terms of the policy for you to review. If they refuse to do this, end the conversation immediately. You want nothing to do with anyone who won’t be up front with you.

Whether they explain everything to you or they send you a policy to review, check the language – especially the claims procedures. Are they simple and easy to understand? They should be. Another way that unscrupulous companies try to defraud consumers is with claims procedures that are so difficult to complete that you’ll eventually give up out of frustration.

Things like deductibles, out of pocket expenses, what types of replacement parts are covered (whether they’re new or used) and who you can use as a mechanic should be clear and understandable in the policy’s terms. Take the time to learn and understand all of the policies so that you aren’t surprised down the line.

Finally, check out any company on the internet or with the Better Business Bureau. The companies with a bad track record are being investigated very openly and will be easy to discover. This simple check could save you thousands of dollars on a fraudulent auto warranty.

Breakdown vs. wear and tear – These are terms that are used to class repairs. Breakdowns are just that – unexpected and beyond usual, necessary repairs. Wear and tear typically refers to belts, pumps and things that will have to be replaced eventually in the normal course of operation. To get the maximum benefit, only go with policies that cover both.

Reinsurance – This is another insurance company that backs up the initial insurer in case they fold or go out of business. Any company you sign with should have at least one and it should be rated an “A” or better on A.M. Best. This can be looked up fairly easily on the internet.

Transferability – This refers to the ability to transfer the extended warranty if or when you sell the car. It’s best to only buy policies with this option, as they add to the value of your car.

Repair shop – As you might expect, this refers to the place where the actual repair takes place. When buying an auto warranty, you want to be able to pick any shop you want to service your car. Be wary of limitations in this section – the better policies will let you go wherever you want.

Towing service – This is a common benefit that should be included in the policy – if your car breaks down, you won’t want to deal with calling a private towing company yourself. It’s also good to find a policy that provides you with a rental car if the repair will go overnight.

Overheating – Overheating is damage to your car that occurs when a part gets too hot. Some policies won’t cover overheating of any kind, so be sure this isn’t in your policy.

Money Back Guarantee – This should be exactly what it sounds like. Some companies will play with the definition, so if it sounds hard or difficult to access, go to another company.

Claim procedure – These are the policies and procedures you need to follow in order to get your mechanic paid. The simpler they are, the better – avoid companies who make these unusually difficult.

Deductible – This is the amount of money you’ll have to pay before the policy goes into effect. Some policies have them, others don’t. In either case, you should be well aware of them before you sign any policy. In some cases, they may also be known as out of pocket expenses.

Reimbursement – There are policies that require you to pay for the repairs up front and then file with the company to get your money back. This may allow you to get a cheaper policy, but be aware that it’s another level of hassle that you’ll have to deal with.

There are also several large and well-known companies that are currently experiencing financial difficulties. Be sure to consider how this affects your warranty. GM, for example, has recently filed for bankruptcy, so upholding warranty obligations may be more difficult for them than for a company like Ford that isn’t experiencing as many problems.

The next step in evaluating a potential warranty is reading the fine print and understanding each specific term. By “terms” we mean both how words are defined – “drive train” and “power train,” for example – as well as the period of time during which the warranty is in effect. This period of time is usually expressed in either a unit of time or a number of miles.

If you have any questions about a term or policy you discover, ask away – a reputable company will be happy to make sure you have all the information you need to make an informed decision. On the other hand, a company that’s reluctant to show you the details of a warranty before your purchase should cause you to be wary. In fact, it’s probably best just to buy your warranty elsewhere in this case.

Also, ask for references from the company and follow up to find out what others’ experiences have been like. If they don’t have references, check with the Better Business Bureau and search online. There are a number of car owners’ forums where people are happy to share their experiences. Keep in mind, though, that people who have had a negative experience are much more likely to make their opinions known, so take negative reviews with a grain of salt. Do, however, consider the overall pattern of reviews. If one particular issue keeps coming up, then the issue generally has merit and can’t just be attributed to sour grapes.

Next, be sure to find out what kinds of parts are specified for repairs. Some warranties specify new, manufacturer’s parts only, while others specify used or reconditioned parts. Others specify parts certified by the manufacturer, which may be new or reconditioned. Know exactly what your warranty will pay for and what you’ll be expected to pay so that you aren’t surprised when you go to make a claim.

This brings us to our final consideration – out of pocket expenses. Just because you have a warranty, don’t expect everything to be covered. Know what you’ll be expected to pay if you file a claim, as well as what you’ll be required to do to keep your warranty in effect. The best warranty in the world will be useless if it requires documentation of oil changes every 5,000 miles and you can’t provide it when needed.

In most cases, you’ll find that new cars come with pretty good warranties included in the purchase price. On the other hand, if you buy a used car that’s beyond its manufacturer’s warranty, it’s still worth it to look into an after-market warranty. Here’s why:

Cars aren’t objects of art. You aren’t going to buy one and park it – you intend to drive it. The value of the warranty is directly related to the car’s ability to keep moving. Figure in the incalculable cost of keeping you and your family safe, and the question becomes not how good the warranty is, but how good of a warranty can you afford? Don’t be too afraid of cost here – a good automotive warranty can pay for itself with just one major covered repair.

What you need to know from this point on is the reputation of the company that’s underwriting the warranty, the specific terms of the warranty, and the service record that the company has when it comes to fulfilling their obligations under the warranty. Any company that seems to be unwilling or unable to produce this information for you isn’t a company you want to do business with – vote with your feet and go elsewhere. There are currently large class action lawsuits under way against some disreputable auto warranty companies – no reputable company is going to have an issue with answering your questions and proving that your trust in them will not be misplaced.

The specific terms of the warranty include how the terms or words in the warranty are defined, as well as the term or time period for which the warranty will be in effect. Pay special attention to both. “Drive train” and “power train,” for example, aren’t standardized terms, so you’ll need to know how they’re defined according to the terms of the particular warranty you’re considering. Terms can also vary for different pieces of equipment. Drive train protection, for example, may exist for a longer period of time than transmission protection, depending on the specific warranty you choose.

And when it comes to know the service reputation of a company, check with the Better Business Bureau and on online car owner’s forums. Know that people who have had a negative experience are more likely to share it than people who have had a positive experience, so take reviews with a grain of salt. But if you see the same complaints coming up again and again, or if the company seems to have more than its share of complaints, consider that a warning you’d be wise to follow.

To find an after-market warranty company, search the Internet. An Internet search will not only turn up individual companies, but also brokers who will offer quotes from many different companies. Several Internet sites for these companies have been approved by the Better Business Bureau – it’s hard to go wrong with these companies. However, keep your guard up – when dealing with brokers, read the fine print to see if the quotes are binding on all companies or if you could be stuck with a higher fee than you expected later on.

Once you’ve found some companies that offer after-market warranties, check up on them with the Better Business Bureau if their websites didn’t have specific information regarding Better Business Bureau approval. This is a critical step. One after-market warranty company is currently involved in a class-action lawsuit filed in response to over 1,000 complaints. Make sure the companies you are getting quotes from are reputable companies by checking for complaints with the Better Business Bureau or in car owner’s forums.

After you have the names of some reputable companies, contact them and ask for documentation regarding what they offer. You’ll probably need to provide them with your name and address, and the year, make, model and mileage of your car. They may also ask about any past accidents, maintenance or repairs. Remember, while you’re evaluating them, they have to determine if you’re an acceptable risk or not.

However, be wary of any company that refuses to provide details about their coverage before you purchase the warranty. Also, steer clear of any company that tries to pressure you into making an immediate purchase or any company that contacts you rather than being contacted by you. These are all classic signs of an unscrupulous company.

Once you’ve identified a few legitimate companies, compare their different offerings carefully. Make sure you understand exactly what will be covered and the conditions you have to meet for coverage. If the conditions you have to meet seem excessive, be wary. Many complaints are made against companies who set up so many conditions that making a claim becomes impossible.

Consider also how the company is treating you during the quote process. Right now, they want your business and are probably giving you the best treatment you can expect. But if they aren’t responsive or providing good customer service at this point, don’t expect them to treat you better later on.

In addition, if you’re buying an after-market warranty to supplement an original warranty which is changing in coverage rather than expiring completely, be aware of where the coverages may overlap. Some companies won’t pay on claims that your first warranty covers – even if only partially – while others may be more flexible in sharing the costs your original warranty doesn’t take care of.

And finally, as with any online purchase, it’s a good idea to use a credit card for your policy so that you can also file a complaint through your credit card company should it become necessary in the future.

First and foremost, don’t succumb to scare tactics – reputable companies have no reason to engage in these behaviors. For example, be cautious with any postcard or mailer that warns that your warranty may be expiring or says you need to act immediately. The warranty that you have with your car hasn’t changed simply because you receive a postcard. Call your dealer or find your copy of your warranty and check out the terms and expiration dates for yourself before running out and signing up for coverage you don’t need.

Generally speaking, you should never give out personal information like social security numbers, bank, or credit card numbers over the phone to any telemarketer. Be familiar with the warranty you currently have so that you’ll know if you need one or if what’s being offered to you is overlapping coverage. In general, if you think you need an extended warranty, you should research coverage yourself rather than waiting for a company to approach you.

In addition, any extended warranty should have minimal provisions. If there’s a great deal of fine print or a lot of conditions you have to meet before you can access the warranty, you can be reasonably assured that it’s fraudulent. Before spending any money with a company on an extended warranty, call the Better Business Bureau. Many complaints of fraud have been issued against companies selling useless after-market warranties, particularly in the Southeast. Your local Better Business Bureau will have updated records on the companies whose business practices are questionable, enabling you to choose a legitimate warranty provider.

To give you an idea of what you can expect if you don’t do your due diligence, be aware that some of these fraud allegations include difficulty in obtaining payment for repairs, refusal to provide customers with a copy of the coverage before purchase, and failure to cover repairs that should have been covered. To avoid falling into any of these situations yourself, be sure to check a potential provider’s reputation with the Better Business Bureau and on car owner’s forums.

However, know that a warranty need not be fraudulent to be useless. If a company makes promises it doesn’t deliver on, that’s fraud. But, if a company delivers on its promise and it turns out that those deliverables aren’t actually helpful to you, the warranty isn’t fraudulent, but it is useless. Overlapping coverage is probably the largest issue you’ll run into. Before you purchase any warranty, see if coverage overlaps with your existing policy and whether what you pay for the warranty really represents a cost savings over setting the warranty purchase price aside for repairs you might need later on.

It also makes sense to see if you’re eligible for a dealership warranty in addition to the manufacturer’s warranty. A dealership’s warranty may cover routine maintenance or other expenses not covered by the manufacturer’s policy. Keep in mind that not only is a car an expensive purchase – probably second only to purchasing a house for most of us – the car industry is struggling and it’s a buyer’s market.

One thing you have to remember is that every manufacturer’s warranty is different. Not only are warranties different from say Ford to GM, but the warranties offered on each manufacturer’s different makes and models can be different as well. There’s no substitute for carefully reading the warranty to figure out what coverage you have.

Another important consideration is how different systems of the car are defined. Take the power train and drive train, for example. There’s no industry standardization for these terms, so they mean different things to different manufacturers. To find out exactly what’s covered by your warranty, you’ll have to read your manufacturer’s paperwork very carefully.

While reading your paperwork, make special note of the terms of the warranty. Does the warranty last for a period of time, for a range of mileage or a combination of the two? Most warranties will state a term of “…until A or B – whichever comes first.”

Typically, the warranty will cover moving parts that are subject to wearing out – particularly moving parts that have the potential to wear out before they should. In addition, manufacturing defects aren’t always covered by your warranty. If a known manufacturing issue arises, it’s more likely to be handled by the manufacturer with a recall.

Make sure you also understand what you have to do to keep your warranty in effect. For example, if you don’t have documentation that you have had regular oil changes, your warranty may not cover transmission problems. Not only may you have to have routine maintenance done, but there may be conditions that specify where the maintenance may be performed and what products may be used. If you connect jumper cables wrong and short out your alternator, don’t expect coverage for that either.

Overall, there’s no substitute for carefully reading and understanding the manufacturer’s warranty, preferably before you purchase the car. Find out what’s covered, and what you need to do to keep that coverage in effect before you ever need to make a claim so that you aren’t stuck with unexpected repair bills.