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Extended warranty overview
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Risk retention vs. Insured products
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The Warranty Wizard

1. Coverage level: Which level of extended warranty coverage are you interested in?

Check all levels of coverage that you would like to consider:

Fair: Powertrain
Good: Major Components
Better: Factory-like
Best: Luxury

 
 
Breakdown vs. Wear-and-tear: All extended warranties cover parts that break. More comprehensive warranties also cover parts that wear out. While breakdown-only products may increase the number of failures you have to pay for yourself, they may have lower prices. Would you like "wear & tear" coverage?

 
 
Overheating: Some extended warranties cover breakdowns resulting from engine overheating. While increasing the repair costs you may have to pay in the event of overheating, policies without this coverage may have lower prices. Would you like overheating coverage?

 
 
Payment caps: While all extended warranties include caps on lifetime payouts, some have additional caps (for example: “transmission replacement not to exceed $4,000”). While increasing the cost you may have to pay should these components fail, contracts with secondary caps may have lower prices. Do you want to consider secondary caps?

 
 
Policy backing: The level of default insurance influences the risk to payouts under an extended warranty. Generally, Risk Retention contracts have greater default risk than products backed by insurance companies. While increasing the costs you may have to pay in the event the policy administrator defaults, Risk Retention products may have lower prices. Do you want to consider risk retention products?

 
 
Benefits: Many extended warranties include benefits such as roadside assistance, towing, trip interruption coverage and rental car coverage. While increasing the costs you may have to pay during a breakdown, contracts without benefits may have lower prices. Do you want to consider products without benefits?

 
 
Repair payments: Many extended warranties are set up so that the administrator pays the repair facility directly by corporate credit card. However, if you are you willing to pay upfront and be reimbursed for repairs, the price of your contract may be less. Do you want to consider reimbursement contracts?

 
 
Repair facility: Many extended warranties allow the policyholder to choose where to have repairs done (e.g., dealer, independent service facility). However, if you are you willing to visit only repair facilities designated by your warranty provider, you may save on your service contract. Do you want to consider service contracts that restrict your choice of repair facility?

 
 
Transferability/Cancellations: Many extended warranties allow the transfer of the contract in a private party sale or to cancel the policy for a pro rated refund. However, if you are willing to restrict your transfer and cancel options, you may save money on your warranty. Do you want to consider service contracts with transfer and/or cancel restrictions?

 
 
Financing: Many extended warranty products provide financing options at little or no additional cost. Do you want to consider service contracts with financing options?