You just bought a car, and you need a repair agreement. But where do you go? How do you buy one? How much do you pay? What do you do?
You can either purchase a repair agreement from the dealership where you pirchased your vehicle, or from a third party company. But, before you buy from a warranty compnay, make sure that they are a reputable company and not some fly by night operation.
Before you pay or sign anything, make sure you get a copy of the actual contract and take all the time to read it. If you’re spending your money on it, you want to make sure you understand what it entails. The dealer and the company brochure are not going to be as clear and detailed as the actual contract will be. If you decide to buy, make sure that you can take a copy of the actual contract with you, too. You want it to have all the necessary information including your name, car information, duration, type of coverage, optional coverage, and especially the name and address of the backup insurer on the contract. When you get home, reread the contract and pay special attention to the exclusions. If decide you don’t want it after all, you can cancel within 30 or 60 days for a full or partial refund.
To avoid the hassle of negotiating and the possibility of being overcharged, many prefer mechanical breakdown insurance (MBI) since prices are regulated by the Department of Insurance. Policies are sold by banks, credit unions, insurance agents, and the companies themselves. Plus, you can legally and conveniently buy them over the Internet.
Before you buy though, make sure that the insurance company is licensed by the Department of Insurance. If you buy the policy from a website other than the insurance company, make sure the agent or seller is also licensed by the Department of Insurance. This will cover you to make sure your claims always get paid.
Many new car repairs are included in the warranty that comes automatically with your purchase. They vary in length of coverage and the parts they cover. They usually cover the major parts for at least one year. In the case that you buy a repair agreement on top of the warranty, the warranty pays first if the repair is covered.
If you buy a used car, you too can buy a service contract. Before you even buy the car, you’ll want to find out if the prior owner(s) maintained it properly. Have it inspected by a reliable repair shop separate from the dealer to make sure the car is in good condition. After you purchase, you will probably still want to buy a repair agreement. As mentioned before, many contracts do not cover wear and tear repairs, but there are some that do. Try to get an agreement that covers those repairs because the more miles your car has, the more likely it will need a repair due to simply wear and tear rather than factory defect.