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Services and Maintenance Tips: Extended Warranty Myths Debunked

Services and Maintenance Tips: Extended Warranty Myths Debunked

While many buyers diligently research their chosen vehicles and pricing strategies, a significant number overlook the Finance and Insurance (F&I) office, where enticing offers like extended car warranties are presented.

Just as a used car buying guide helps you make an informed decision about your vehicle, understanding the ins and outs of extended warranties is crucial.


In this blog post, we’ll explore whether an extended warranty is the right fit for your used car and what factors play a crucial role in this decision-making process.


What is an Extended Warranty Canada?

An extended car warranty, known by various names like:


  • service agreements
  • mechanical breakdown insurance
  • vehicle protection plans
  • extended service contracts


These serve as an additional layer of coverage beyond the manufacturer's warranty.

Typically available at dealerships during the used car purchase or as an aftermarket add-on post-purchase, these warranties can be financed or paid upfront alongside the vehicle cost.


They encompass the expenses for labor and parts needed to repair specific components during regular use, excluding damages resulting from neglect, misuse, or accidents.



How Do Extended Warranties Work?

Extended warranties function by offering coverage for specific components and systems of your used vehicle. When you invest in an extended car warranty, you're essentially prepaying for potential repairs or replacements that may arise during the coverage period.

The process involves:


1. Selecting a Plan

Choose from various levels and plans, ranging from basic powertrain coverage to more comprehensive options that include electronics and suspension.


2. Coverage Period

Extended warranties come with a predetermined coverage period, usually measured in years or mileage. Understanding this duration is crucial to maximize the benefits of your warranty.


3. Claim Submission

If a covered component experiences a mechanical failure, submit a claim to the warranty provider. This typically involves contacting them, providing necessary documentation, and authorizing the repair.


4. Repair Approval

The warranty provider reviews your claim to determine if the repair is covered. If approved, they collaborate with an authorized repair facility to complete the necessary repairs.


5. Cost Sharing

Depending on your plan, you may need to pay a deductible or a portion of the repair costs.

Extended warranties don't typically cover routine maintenance tasks like oil changes or tire rotations. They are designed to address unexpected mechanical failures.


Debunking Common Myths About Auto Extended Warranties

Now, let's dispel the top myths surrounding extended car warranties. Why does it matter? Because clarifying misconceptions can prevent surprise repair expenses, dissatisfaction with coverage, and unnecessary frustration.


1. Extended Warranties Are Always Worth It

Extended warranties don't always justify the car warranty costs for every car. It's this. While having coverage for breakdowns and unexpected repairs provides peace of mind, there are situations where it may not be the best choice.


For example, if your car is on the brink of its last days, and you find yourself on a first-name basis with tow truck drivers, investing in an extended warranty might not be the most practical. The money spent on the warranty could potentially be better used toward getting a new car instead.


2. Auto Warranties Cover Everything

Not all repairs and maintenance are covered by auto warranties. Each plan varies in coverage. For example, Endurance's basic program protects essential systems like the engine and transmission, but it doesn't cover unrelated components such as the air conditioning. Keep in mind the differences in coverage when considering an extended warranty.


3. You must Get Car Serviced at the Dealership to Maintain the Warranty

Car dealerships may benefit from the misconception that vehicle owners are required to exclusively use dealership service departments to maintain their warranty. However, this is not accurate. According to federal law, you are not obligated to go to the dealer for out-of-pocket repairs. Don't just take our word for it—federal regulations support your freedom to choose where you get your repairs done.


4. All Extended Warranties are the Same

Like various healthcare or home protection insurance policies, extended car warranties come in many options. As highlighted in Myth #2, car owners have the flexibility to select from diverse plans, each offering different costs and levels of protection. These warranties often come with varying deductibles, providing opportunities to reduce premiums or constrain out-of-pocket expenses.



5. New Cars Don’t Need an Extended Warranty

Owners of new cars covered by the manufacturer's warranty might not see the immediate necessity for additional protection, but there are benefits to securing extra coverage sooner rather than later. Purchasing an extended warranty early comes with cost advantages—like obtaining life insurance, where premiums tend to be more budget-friendly when you enroll early.


6. Claims Will Be Denied on Technicalities

Contrary to belief, reputable extended car warranty providers aim for transparency and fair dealings. Claim denial on technicalities is not a common occurrence, provided you adhere to the terms and conditions.


7. Repairs Must Be Done at the Dealer

You may have the flexibility to choose where you get your repairs done, but it’s possible that some warranty providers will specify that the repairs must be done at authorized service centers. If this is important to you, then ask what their policy is, and ensure that it’s noted in your agreement.


8. Older Cars Aren’t Eligible for Coverage

Contrary to the common misconception that extended warranties are exclusively for brand-new cars, these plans cater to a broad spectrum of vehicles, including older cars. In fact, specific extended warranty plans are crafted to address the unique needs of aging vehicles.


These coverage options encompass a range of components. So, if you own an older vehicle, rest assured that there are extended warranty plans designed to meet its specific requirements and provide you with peace of mind on the road.


9. Warranties Only Cover Major Failures

Extended warranties can cover a range of components, not just major failures. This coverage makes sure that unexpected repairs across various vital components are included.

Before dismissing the value of an extended warranty, you must explore the specifics of the coverage provided to fully appreciate the extent of protection it can offer for your vehicle.


10. Getting Repairs Approved is a Hassle

Reputable warranty providers prioritize a smooth experience for their customers. By fostering clear communication channels and emphasizing the importance of proper documentation, these providers make sure that the process of getting repair approval becomes not only simple but also efficient.


11. Warranty Work Voids Your Manufacturer's Coverage

Engaging in warranty work under an extended warranty does not jeopardize or void your manufacturer's coverage. In fact, the two can harmoniously coexist, which offers complementary layers of protection for your vehicle.


This means that any repairs or services covered by the extended warranty won't undermine the benefits provided by the original manufacturer's warranty.


12. Cancellation is Not Allowed in Extended Warranty Plans

Terms and conditions may differ among providers. Understand the specifics of the cancellation policy offered by your warranty provider to understand the process, any associated fees, and the timeframe within which cancellations can be initiated.

This knowledge will help you understand your options and make informed decisions regarding the longevity of your coverage.



13. Warranties are Expensive

Dispelling the myth that "Warranties Break the Bank," you must recognize that extended warranties span a spectrum of price ranges. While some can be quite affordable, the key lies in a thoughtful evaluation of the costs relative to potential repair expenses. Consider your vehicle's make and model, its historical maintenance needs, and your budget constraints.


14. Extended Warranties are just Unnecessary Expenses

Beyond mere financial predictability, these warranties offer a safety net against unforeseen repair costs, which results in significant savings over time, especially for those who value assurance and want to avoid unexpected financial burdens.

As you weigh the costs, think of it not just as an expenditure but as a strategic move towards protecting your budget and a worry-free ownership experience.


15. You Can’t Resell an Extended Car Warranty Canada

While not all warranties are transferable, many reputable providers offer plans with transferability options. This means that if you decide to sell your vehicle before the warranty expires, you can often transfer the remaining coverage to the new owner. You must carefully review the terms and conditions of your warranty to understand its transferability.


Don't Be Misled – Talk to the Experts at CarHub

Investing in an extended vehicle warranty, complete with its diverse range of plans, offers a valuable means to secure peace of mind when it comes to costly repairs. Trust CarHub as your reliable partner for everything car sales, maintenance & protection.

Our team is here to guide you through the details to make sure you find the perfect coverage for your car’s protection. Contact us now.

Categories: Service & Maintenance Tips, The More You Know

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