Car Warranty – Dealer's Price

Almost all new cars come with a manufacturer's warranty, hence the coverage will last at least three years from the day you buy a new car. A new car warranty is always included in your price, so be very careful to understand the entire manufacturer's motor warranty terms before signing. Some dealers would also offer coverage only one year; some car warranty coverages will last longer. Many warranties will be of the either/or type, whichever comes first kind-of-situation. Hence, it's imperative that you read the fine print carefully before signing.

Extra car warranty coverages or service contracts are the ones that will cost you more money. This is where the dealers make a lot of money. Be sure to include a judgment value about the worth of the extra coverage in your assessment of a potential purchase. There have been cases when the dealers try to sell you a dealer car warranty instead of a manufacturer's warranty. Often with a dealer car warranty, all the repair and services on the car need to be done at a single dealership. So it is best to keep away from dealer auto warranties. Extended warranties are enormous moneymakers for auto dealers. There is a huge mark up in the extended warranty scam hitting the auto industry. It is at least 100 percent and often more than that.

You can bet your new car that your car dealer will try his level best to push and cajole you into buying an extended warranty at an inflated price. Many new cars are sold with 4-year or 50,000 mile warranties. Some manufacturers offer cars for 6-years or 60,000 mile warranties, too. These cover engine and emission repair. Be very leery of unsolicited extended auto warranty offers arriving by mail or email. Choose a company rated by A.M.Best or BBB. You can learn about the typical dealer's cost by referring to the National Automobile Dealer's Association (NADAGuides.com) new car pricing guide. Keep in mind though that the figures are not always on the mark. There are two factors that could make the dealer pay less than the listed dealer cost or dealer invoice published in the guide.

Go to websites like WarrantyDirect.com, Autobytel.com, Autoweb.com, CarSmart.com, eBay.com, Autos.yahoo.com and Edmunds.com and find out more about the offers and car warranties.

Never allow the car dealer to pressure you into making a quick extended auto warranty decision. Firstly, make sure you need what you are buying. Even if you jump at the dealer's offer, try to get a better deal by shopping around. The dealer would make a neat profit while selling you that extended auto warranty. Make an informed decision by knowing the dealer's cost based on the car's value. Research and also look at quotes available online.

One of the industry's dirty secrets is that the dealers get kickbacks from lenders for charging gullible customers extra hyped interest rates. If you are qualifying for an interest rate of 8%, the dealer would attempt to charge you a higher rate. For example, if your credit allows you a loan at 8%, the dealer signs you for 12%! You pay $20,000 for 5 years, at 8%, which is $433. The contract is for a 12% rate, which makes the price $475. The extra money here goes straight to the dealer's pocket!

Another way to avoid dealer's high prices on extended warranties is to purchase from other sources. The auto warranties are available for all new cars that are generally around $500 - $700. This should be remembered when the dealer tries to sell the auto warranty to you for $2,500 - $3,000 plus an additional $500 in additional interest if you happen to finance the car warranty as part of your car loan!