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By
Susan Frissell
Women With Wheels |
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As some of you may have experienced, there are companies selling contracts for
extended warranties on major car repairs. These organizations are very good at
convincing you that your car repairs are going to cost less than the price you
will pay for the contract, if you'll sign on the dotted line. Whether or not
this is money wasted is the question.
Some believe it may be better to take the money you would be spending on an
extended service contract (typically $400-$1200) and deposit it in a high
interest-bearing savings account. If your car should need a major repair after
your "free" warranties run out, it's fairly safe to assume that your reserve
account will cover any cost(s) you might incur. What's more likely to happen
though, is that you will not have to worry about any major repairs too soon,
unless you get a "lemon" (which are now covered by laws), or unless you decide
to keep the car for longer than five years.
Using a Ford Extended Service Contract as an example, the following are some of
the items generally NOT covered by a service contract.
Any Repairs:
Due to recalls by the manufacturer;
Caused by damage or unreasonable
use (misuse, racing, etc.);
Resulting from failure to perform regular
maintenance;
Needed for a covered part caused by failure of a
non-covered part;
If the odometer is altered, broken or repaired, and
actual mileage is in question;
Performed on car outside the United
States and Canada, or repairs required because of use outside the United
States or Canada;
Made on or before enrollment date of contract.
Other items NOT covered include any damage to the interior carpet, rearview
mirror, trim or upholstery; exterior adjustments (bumpers, glass, moldings,
paint, rust, etc.); water leaks; wheel covers, or wind noise.
Those repairs most commonly covered under regular maintenance -- such as
battery and cables, belts, hoses, brakes, coolant, exhaust systems, filters,
lubricants, fluids, lights, shocks, spark plugs and wires, squeaks, tune-ups,
wheel balance and alignment, and/or wiper blades -- are also the responsibility
of the owner.
Damage to your car caused by the environment including tree sap, salt, hail,
lightning, and the like, are -- of course -- not covered under the service
contract either. Unless you purchase another little "extra" known as the
Maintenance and Wear Option contract, your car will not be covered for
maintenance service and wear item replacements. To the extent allowed by law,
loss of the use of your car, including loss of time, inconvenience, commercial
loss or consequential damage also is not covered.
The extended Service Plan Contract, which often comes in the mail after you've
purchased your car, is coverage designed to complement the manufacturer's
warranties. The extended contract does not take the place of those warranties
that come with the vehicle. When a car is sold, the manufacturer's warranty
must be transferred to the second owner, otherwise it will be that person's
responsibility to pay for any repairs that the transfer of the warranty would
have covered.
All vehicles today come with several kinds of warranties, and most for 36,000
miles and upward. My rule of thumb always has been that I will take my
chances. The longest I have kept a car has been seven years. I took very good
care of it and, consequently, did not need to make major repairs on it. And
that was 20-plus years ago, when cars weren't as dependable as they are today.
Most warranties included by the manufacturer are coverage enough, and the types
of problems one may experience with a newer vehicle are taken care of under
these warranties. It's a good bet you'll have the coverage you need when going
just with the standard manufacturer's warranty.
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