T-WRX-02
11-03-2001, 12:03 AM
This is kind of a public service announcement, in general, for all makes of vehicles. Many car owners are buying extended warranties for their new cars, but may not keep their cars through the manufacturer's bumper-to-bumper general warranty period.
First, there are no true manufacturer warranties ... just third party providers licensed to use the manufacturer's name on the forms. If you have a problem ... it is to be settled with the provider of the extended warranty, not the manufacturer.
Second, for example, if you have a three year bumper to bumper warranty and you buy (for example) a fourth year 48,000 mile extended warranty plan, there are a few things you should be aware of. The plan goes into effect on day one of its purchase, even though it does not provide any service the basic manufacturer's warranty provides. This means if you cancel it before your factory warranty expires (for example, the last day of factory warranty-month 36) you are not entitled to all of your money back. Worse, since the warranty started on day one, you are entitled only to year four for reimbursement (or 25% of what you paid)! But wait, the rip-off has just begun. You are only reimbursed the amount that the policy was sold to the dealership for - usually half of what you paid for it. Gee, you are down to a mere 12-1/2% of what you originally paid for the policy. But, lets go on a step further... there is also a cancellation fee, usually $30 or more to be paid by you! Now you are entitled to less than 10% of the money you paid for the plan back ... and you never were able to use one penney's worth of the extended warranty policy! :mad:
So, before you plop down $500 to $1000 for an extended warranty, read the fine print. They usually don't cover items that usually fail and some require a copayment of $25 to $100 per incident. Some dealers jack up these warranty costs to pick your pocket further. Many of the big ticket repairs are covered by the manufacturer's implied or extended driveline warranties.
So, be aware of what you are purchasing. If you usually keep a car for less than the manufacturer's warranty perion, DON'T buy an extended plan. If you keep a car for a long period of time, you may wish to purchase a plan when you buy the car (and they will gladly let you finance that plan with the purchase - effectively costing you 1-1/2 times what the original cost was)! You can always purchase a plan when your warranty expires, but these usually cost a little more, but the risk is less. Read the fine print!!! Caveat emptor !!:monkey:
First, there are no true manufacturer warranties ... just third party providers licensed to use the manufacturer's name on the forms. If you have a problem ... it is to be settled with the provider of the extended warranty, not the manufacturer.
Second, for example, if you have a three year bumper to bumper warranty and you buy (for example) a fourth year 48,000 mile extended warranty plan, there are a few things you should be aware of. The plan goes into effect on day one of its purchase, even though it does not provide any service the basic manufacturer's warranty provides. This means if you cancel it before your factory warranty expires (for example, the last day of factory warranty-month 36) you are not entitled to all of your money back. Worse, since the warranty started on day one, you are entitled only to year four for reimbursement (or 25% of what you paid)! But wait, the rip-off has just begun. You are only reimbursed the amount that the policy was sold to the dealership for - usually half of what you paid for it. Gee, you are down to a mere 12-1/2% of what you originally paid for the policy. But, lets go on a step further... there is also a cancellation fee, usually $30 or more to be paid by you! Now you are entitled to less than 10% of the money you paid for the plan back ... and you never were able to use one penney's worth of the extended warranty policy! :mad:
So, before you plop down $500 to $1000 for an extended warranty, read the fine print. They usually don't cover items that usually fail and some require a copayment of $25 to $100 per incident. Some dealers jack up these warranty costs to pick your pocket further. Many of the big ticket repairs are covered by the manufacturer's implied or extended driveline warranties.
So, be aware of what you are purchasing. If you usually keep a car for less than the manufacturer's warranty perion, DON'T buy an extended plan. If you keep a car for a long period of time, you may wish to purchase a plan when you buy the car (and they will gladly let you finance that plan with the purchase - effectively costing you 1-1/2 times what the original cost was)! You can always purchase a plan when your warranty expires, but these usually cost a little more, but the risk is less. Read the fine print!!! Caveat emptor !!:monkey: