Car Buying – Should You Go For Dealer Auto Warranty or Third-Party?

You have paid a handsome amount to your dealer for your car and he is now trying to needle you to cough up a similar amount for an extended warranty. It is always a safe bet to purchase your auto warranty from the dealership. In any case the dealership would not run away and would be there to uphold his contract, if he is a reputable company.

Many times the familiar walls and reputable extended auto warranty companies have been known to have sold people car warranties they don't really need or an auto extended warranty that is way too high in costs.

The dealers are also known to sell third-party backed warranties, also known as aftermarket warranties. It's prudent on your part to check the name of the company before signing the dotted line. Check the credentials of the company standing behind the auto warranty agreement.

You should make sure that the car warranty you are entering into should necessarily be from an A+ rated insurance company or the manufacturer himself. In case you want the best of both worlds, go and inquire about car warranty, auto warranty, extended warranty, auto extended warranty in the dealerships and make your choice. You can also research the online companies like WarrantyDirect.com, Autobytel.com, Autoweb.com, CarSmart.com, Autos.yahoo.com, eBay.com and Edmunds.com, etc.

Ask your dealer if he offers less expensive third-party motor warranty coverage. If anything goes wrong, the dealership would definitely chip in to cover you in the name of sound business sense.

Most probably, third party car auto warranty companies offer lower cost for better coverage, fewer loopholes and many strings that are often buried in the fine print of the auto warranty papers. You have to be careful and pick up a reputable company that would likely be around for the duration of your auto warranty period.

An independent vendor giving an extended warranty would mostly cost you half as much as an extended service contract from a manufacturer. In this case, the quality of this kind of car warranty agreement would vary widely from company to company.

Shop very carefully while looking for a third-party auto extended warranty.

With an aftermarket extended warranty, you might have to pay for the repair upfront and then wait to get reimbursed. This process might take many weeks. But make sure you ask about the reimbursement process before signing an auto extended warranty.

All the dealers welcome car warranty repairs, as they are compensated work for them. Only a few people know that manufacturers give incentives to the mechanics to get the work done right the first time itself. Conversely, many dealers skimp on the diagnostic tests to avoid revealing expensive repairs. The bottom line is that anything you buy over and above the car, like a car warranty, is a potential profit center for the dealer. He is making money out of it, plain and simple. According to a recent survey, many people paid a 300% markup on dealer warranties and third party car warranty deals. There are stories of people overpaying by $3,000! Hence, go easy and check out all the details before you jump.