Automobile Extended Warranty Protection?

Guest Blogger
Sandra L.Torres
Senior Vice President of Sales & Marketing
800.333.3028 Ext. 1609

Do You Need Automobile Extended Warranty Protection?

Most people eschew any additional products when purchasing a new vehicle simply because it adds to the price. Extended warranties probably add the most in terms of cost, but also have a tremendous value.

Automobile extended warranties are also referred to as Vehicle Service Agreements or Mechanical Breakdown Insurance, but however you choose to call them they provide the new vehicle owner with peace of mind while protecting their investment.

Statistics show that major automobile repairs are most likely to occur in the third year of ownership. It’s also true that most people will feel the pinch having to pay on the average of $1,500 for a major repair, money that would be better spent on college tuition or a well deserved vacation.

Why then do only 30 percent of all automobile buyers opt for this valuable and practical protection?  Apart from the additional cost, this coverage has received a bum rap due to misrepresentation by some dealership personnel. I’m sure you have heard this before, “It covers everything, bumper-to-bumper.”  Of course bumpers are not covered.  Or how about, “The cost is $2,700. Too high? I can do $1,800. Still too high? Well how about $900?” And all prices are for the same coverage.  Makes you want to run the other way.

Only you can decide if this protection is for you. Things to consider when making this decision are:

·       How long are you going to keep the vehicle?  The longer you keep the vehicle the more necessary a Vehicle Service Agreement is.

·       How many miles do you drive per year?  This will determine how soon you will be out of factory warranty. Are you prepared to take the risk?
·       Do you have extra cash on hand in case of a necessary major repair?  As previously stated the average major repair is $1,500, but a transmission replacement can cost as much as $3,000.
·       Some vehicles are known for unexpected and expensive repairs.  Did you choose one of these?

After you have considered these points check with your credit union to see if they offer a vehicle warranty product. If so, they have already researched the market and have chosen the best possible program for their members. Your loan representative will be able to help you choose the right plan to suit your needs.  Of course, the credit union product will always offer you quality and the most value for your money.