Extended auto warranties

Extended warranty offers are everywhere these days, but that doesn’t mean they’re well understood. An extended warranty is not a form of insurance, but it is a service. However, the key point here is they are not regulated in the same manner as insurance providers, so navigating the offers should be done with care.

Breakdown insurance is regulated and protects against mechanical breakdowns that would not be caused in an accident or can be rendered as a fault of your own. Extended warranties do the same but unlike breakdown insurance, it is not regulated which means some shady actors can get involved. The reputable providers sell through dealerships, while others occupy third-parties to sell the warranty. In general, the ones through dealerships have been vetted but that still does not mean you should not read the fine print. The good news is the following providers have been vetted and used frequently, so if you’re interested, only the fine print that applies to you needs to be read.

Endurance

One of very few direct providers in the industry, Endurance administers the contract it sells, something that is not commonplace in the extended warranty business. There are several warranty services that use brokers of car service contracts which means they sell the contract but are not ultimately responsible for it. If you contract Endurance, and suffer a blown transmission, you will be dealing directly with Endurance and the same customer service representative. Now, the downside to Endurance not outsourcing a piece of their business is they need to maintain stricter limitations on what is covered and offer fewer contracts to choose from. This also makes them more expensive than the average provider.

Autopom!

A fun word, Autopom! is widely revered for its excellent quoting process, and after industry experts compared multiple quoting processes, contract stipulations and available plans, Autopom! emerged on top. The exercise compared quotes on three cars (all with varying mileage) and Autopom! ranked the most affordable, churning out an average of $0.01 per mile quote. The process was also lightening quick.

Autopom! is a broker selling service which moves 21 car service contracts for cars anywhere with 1,000 to 200,000 miles on the odometer. As we mentioned earlier with Endurance, because Autopom! is a broker, the person you speak with will not represent the extended car warranty you end up with. Yet, despite selling multiple warranties from multiple companies, the rankings of the companies Autopom! works with and their customer service/business dealings has been exceptional.

AA Auto Protection

Lastly, AA Auto Protection. The value with AA is hands-down … the down payment. Featuring an average down payment of just 2 percent of the total cost, it is hard to find a better down payment leader in the business. Not to be confused with AAA, AA Auto Protection is a tad more expensive than the competitors, but this is understandable with such a low, down payment. A broker of roughly 17 distinct contracts, like Autopom!, AA provides an array of options. This is good for cars with less than 100,000 miles, but not great for those over that amount. The average contract is approximately 20 pages long, but each page jams 1,500 words into it. Yikes!

But again, 2 percent of the total cost as a down payment, 2 percent! That counts for something.