People are spending millions of dollars each year on Extended Warranties for their cars. How do you know which warranty to buy? How do I avoid getting ripped off? Should we buy it through the Dealership?  I’ve done some research and have some helpful tips.

1. You can buy an Extended Warranties on new and used vehicles from the Dealerships, but  usually at a higher price than what can be found online.

2. Make sure the Warranty covers BOTH Mechanical Breakdown and Wear & Tear because some Warranty companies will classify anything that happens as wear & tear and not pay for the repairs.

3. The company you purchase any Warranty from should have an A.M. Best rating of an A or A+.

4. It is better to buy a $0 Deductible and pay a little extra. Make sure the deductible is for each visit and not for each part.

5. Confirm there is Car Rental and Towing coverage which provides transportation if your vehicle is in the shop being repaired. Some companies offer Travel Reimbursement as an extra benefit.

6. Is the warranty transferable? Some warranties end when you sell the car so make sure your Extended Warranty transfer to the new owner.

7. You want to buy a warranty that allows repairs at any ASC certified shop and not limited to only the Dealership where you bought the car.

8. If you are unhappy with your Warranty and haven’t had any repairs on it, the Warranty Company should refund 100% up to 30 or 60 days.

9. The Warranty Company should pay the Repair Shop directly. You don’t want to pay the Repair shop and hope for reimbursement.

There are some good Warranty Companies out there like Carchex and Warranty Direct but buyer beware, It’s just like auto insurance. You usually get what you pay for.