The Price of Your Warranty – Eligibility and Length of Coverage
There are a wide variety of variables that go into the price of a vehicle extended service contract. The primary drivers are the type of vehicle, the mileage on the vehicle, and length of coverage in both mileage and time.
They make and model of the vehicle is the most important factor when it comes to the price of the warranty. As can be expected, a specialty vehicle like a Porsche is much more expensive to cover and repair than a Chevrolet, and as such the cost of the warranty reflects that. Additionally, special equipment of drivetrains, such as 4×4, will often result higher prices than a lesser equipped and base version of the same model.
And as discussed in the different types of warranties section, the extent of coverage offered greatly affects the price. For example, a bumper to bumper type plan will always cost more than a powertrain only plan on the same vehicle.
For a consumer interested in purchasing an extended service contract, this may seem confusing, but in reality it should enable a buyer to tailor the perfect plan for their needs. A balance can easily be struck between time and miles needed, along with the proper amount of coverage. As with a traditional insurance policy, a good extended warranty should protect your vehicle and your needs perfectly.
Your Vehicles Eligibility
A majority of extended warranties are sold by the dealer at time of original purchase. But if for any reason a buyer decided to pass on the extended warranty at that time, there is still an opportunity to purchase one at a later time, either from the dealer or other sellers. However, if the decision to buy comes a few years later as the vehicle has aged, the choices might either be limited or not available based upon the mileage and age of the vehicle.
In order to be eligible for an extended warranty, most vehicles cannot have more than 100,000 miles on the odometer at time of purchase, and must be less than 10 years old. Any vehicle that still has time or mileage left on the original manufacturer warranty is eligible for the longest and most comprehensive coverages. Used vehicles with under 75,000 miles, and under 7 years old are also generally eligible for excellent plans that can mimic the original manufacturer plan, albeit for a shorter time frame and mileage limit.
Additionally, the older a vehicle is, and the greater the mileage, the less coverage is available. As with a traditional insurance policy, the greater the risk, either the insurance company will limit the coverage available or increase the cost to cover the risk, just as a 25 year old woman would pay less for health insurance than an 85 year old man- the parallels are somewhat similar.
Furthermore, most available extended warranties do not take effect for 30 days after purchase, so those thinking of buying one in order to pay for their engine rebuild or other immediate repair are going to be disappointed. This 30 day delay has been put in place specifically to prevent that type of fraudulent repair claim.
Length of Coverage – The Months and The Miles
The length of eligible coverage will vary based upon the mileage and age of the vehicle that is going to be covered.
On many new vehicles, or those still under some portion of the original factory warranty, plans up to 7 years and up to 100,000 miles from original purchase may be available.
Used vehicles outside the factory warranty can get coverage up to 4 years and 48,000 miles from that date and their current odometer reading can often be offered. On older and higher mileage used vehicles, those over 7 years old and over 75,000 miles, generally 2 years and 24,000 miles are the limit.
Additionally, as the vehicle gets closer to the 100,000 mile mark, the options for coverage grow more limited-both in length of coverage and extent of coverage. The older vehicles may only be limited to a powertrain type coverage, versus the full protection available to lower mileage and newer vehicles. If interested, a potential buyer should investigate the choices available, and select one that best balances their needs and protection plans for sale.
