Auto extended warranties in effect, are an extension of the original manufacturer's warranty. Do not confuse it with insurance, as it is actually a vehicle service contract. Extended auto warranties come in many levels of coverage. Some car warranties cover just mechanical breakdown, while better warranties also cover wear and tear to overheating of the engine.
When buying new car warranty or used car warranty, take care that you read and understand the terms and the cover it offers. Unfortunately most people who buy auto car warranty do not actually realize what they are buying. They don't read the contract, don't understand the coverage and fail to adhere to proper vehicle maintenance schedules. If you don't read and understand the terms and conditions, you may not be able to claim anything when the need arises. Used car warranty coverage depends on the mileage of the car. Better coverage is offered to cars that have been used lesser, i.e. have lesser mileage. When purchasing a used car, check if it already has a warranty. And ensure that you buy an extended warranty before the manufacturer's original warranty runs out.
You can buy a new car extended warranty either from your car dealer or from auto car warranty companies online. Online auto car warranty companies offer cheaper auto car warranty than car dealers and most have better wear and tear coverage. If you are looking for the Internets most comprehensive listing of online warranty companies, you are at the right place. Find car dealers, affordable car insurance, other auto insurance, cheap car stereo and motorcycle dealer at 411autos. And that's not all - online new car buying, buying car accessories, buying new car extended warranty and selling a vehicle everything is possible at 411autos. Compare prices and features and get great bargains online.
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Some buyers are interested ? many are not. For those that are, they're in lousy position because they don't know what an extended warranty actually costs. The Dealer presents a figure they want you to pay?.and you have no base-line figures to compare it to.
Wouldn't it be great if you knew what Dealerships paid for the Extended Warranties they sell....and what they're going to charge for them?
Well, now you can.
It's really very simple. Any new car (or truck) extended Warranty cost is calculated as a percentage of the price - regardless of who makes the car, van, truck or SUV you're considering. Here's how this works.
Let's say you're looking at a new Truck and considering the most common extended warranty - 5 years and 100,000 miles of coverage. The MSRP (the Sticker in the window) says $32,000. The Manufacturer of that truck sells the Warranty to each and every Dealer for 2.3% - 3.5% of the MSRP.
So, for this particular truck we're discussing, the warranty will cost the Dealer between $800 and $1,120 - or 2.3% and 3.5%. That's what he or she will pay the Truck maker.
The Dealer then turns around and adds his or her profit when selling it to you.
In most cases, they will sell the Warranty to you for 60% more than what they paid for it.
So, for this particular truck, the Dealer will sell the extended warranty for between $1,280 and $1,760 (Cost plus 60%)....when it only costs them somewhere between $800 and $1,120.
Here's the formula to use the next time you're considering a Dealers Extended Warranty:
- Total MSRP X 2.3% & Total MSRP X 3.5%. Somewhere in between is the actual Dealer cost. - Total MSRP X 4% & Total MSRP X 5.5%. Somewhere in between is what the Dealer will want you to pay.
So, you know their Cost. And you know the profit they're wanting.
My suggestion is this - when you're presented with the Dealers asking price, tell them you'll pay no more than 10% over cost. That's a far cry from the 60% profit they want - but a much better deal for you.
Make sure you use these simple calculations when you're negotiating the price of a Manufacturers Extended Car Warranty. It should save you a considerable amount of money.
Both Lee Traupel & Tom O'leary are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Lee Traupel has sinced written about articles on various topics from Feng Shui, Cars and Car Auctions. Lee is well known author who writes for autos for more information visit to . Lee Traupel's top article generates over 49500 views. to your Favourites.
Tom O'leary has sinced written about articles on various topics from . Tom O'Leary is an Automotive Portfolio Analyst based in Cincinnati, Ohio and Publisher of , a consumer web site focusing on buying a n. Tom O'leary's top article . to your Favourites.