Smart Car Warranties

The smart car warranty offers a two year or 24,000 miles warranty. They also have a multitude of supplementary extended warranty plans at extra cost. This warranty policy is modest at best among the new car warranty world. Kia offers an industry leading 10 years or 100000 miles limited powertrain warranty, and their free Roadside Assistance hot line is staffed 24 hours a day, 365 days a year and will even come to your rescue for a dead battery or some gas!

We think that’s smart!

Most warranties for new cars range from 3 years/36,000 miles and most new cars come with a 5 years/60,000 miles.

Smart Pros and Cons - Extended Warranties

When you go to a smart dealership for new or used vehicles at car dealers, you will find that most smart dealers offer and try to rope you into buying extended warranties. Before you buy the car, you need to know whether or not you are going to buy this warranty, because the salesperson is going to be quite talented at pushing it on you and making it sound like the best deal you could buy. These make good profits for the dealership, but they may or may not be a good idea for you.

Automotive extended warranties are service contracts that state that the dealership will, under certain conditions, offer repairs and services on the vehicle. The provisions vary tremendously from one dealership to another. Some give you the freedom to take your car to many companies throughout the nation who back the agreement, while others severely limit the service providers who can do warranted repairs.

Tips for Evaluating the Contract

Because these contracts vary so much from one dealership to another, you need to know how to evaluate it if you are going to make an informed decision about one for your purchase. Find out who offers the service contract. You want one that is from a national automotive manufacturer or a reputable national company, not a new or unheard of company.

If the car has a manufacturer’s warranty, find out if the terms on the service contract overlap, and how the overlap is handled. Learn what the years of the actual coverage are, and determine if that is a valuable for you.

Ask to see a copy of the agreement. If the dealerships is not able to offer this, then walk away. They have something to hide. When reading the copy, see what types of services and repairs are covered, and watch out for expensive systems or general wear and tear being excluded. Look for any deductible as well as you evaluate the program. Finally, look at how the claims or requests for service are made under the contract.

Does It Make Sense?

Automotive extended warranties cost pennies for car dealers to put together, yet they cost thousands for the buyer. You have to decide whether or not they make economic sense. The difficulty in this is that you cannot see the future to know whether or not you will face expensive repairs.

While you are the only one who can ultimately decide if the warranty makes sense, you can help make your decision by carefully inspecting what is covered. Also, look at whether or not there is any overlap. Sometimes the extended warranties run for six years, yet the car has a manufacturer’s warranty for five years. If the extended warranty’s time starts calculating the moment you buy the vehicle, you will be left with just one year of “extended” coverage for all that you paid.

For this reason, these warranties make the most sense when purchasing used vehicles that no longer have a manufacturer’s warranty. Even still, you need to check the terms and benefits carefully to ensure that it is a good product. You can also negotiate the price at many car dealers.

Another way to decide whether or not you need an extended warranty is to look at the repair history common to the vehicle you are purchasing. If it has a history of expensive repairs, an extended warranty is almost a necessity. If it has a good track record for the expensive components, then you may be able to forgo the extended warranty and save the money, provided you are willing to take on repairs down the road if they are needed.

Selecting the Right Plan

When shopping for extended warranties, there are three basic options. A warranty from the manufacturer, which is usually the most expensive option, provides factory-backed dealer repairs in a nationwide network. In other words, if you own a Ford and have a Ford warranty, you can go to any Ford service center to have repairs.

A dealership loan has a lower upfront cost and offers service at the dealership. The biggest drawback to this plan is the fact that you can only go to that location for repairs. If you move of the dealership cannot fix the problem, you are out of luck.

An independent warranty is offered through independent companies who contract with networks of dealers and repair shops. These are typically the most affordable, but they may often be offered through fly-by-night companies who do not deliver as promised.

Steering Clear of Scams

Sometimes, you will receive a phone call or mailing wit ha warning that your car’s warranty is about to run out, and an offer to extend it. The Federal Trade Commission warns consumers that many of these “offers” are nothing more than an extended scam. If you do fall for the offer and buy the plan, you will find that the company offering it is gone long before you can make a claim.

So how can you avoid these scams? Never take information about warranties that comes unsolicited at face value. Make sure that what they say about your current warranty is true. Never give out personal or financial information unless you are certain whom you are dealing with. Do not give this out if you have not seen the product. Be cautious whenever you get an unsolicited sales call, especially if it is a recorded message.

If you do decide to pursue a service contract, check with the Better Business Bureau or the Attorney General’s office in your state, as well as any local consumer protection agencies, to find out if there are any unresolved complaints against the company. The legitimate companies will have few, if any, of these complaints. A significant number of complaints is a big red flag that something is wrong with the company offering the contract.