Monday, May 5, 2014
How to Compare Automobile Warranties
Automobile warranties come in two forms -- express warranties and implied warranties. An express warranty is the type of written warranty that you receive from the dealer when you purchase a car. These types of warranties can be compared with one another.
Time Frame
Compare the length of the warranties. New cars can carry warranties that are as long as 10 years or 100,000 miles, while used cars can carry warranties as short as 15 days.
Features
Check to see what each warranty covers. Some warranties cover almost anything that can happen to a car, while others cover just a few components on the vehicle. Likewise, some warranties will cover all or most of the repair costs, while others will cover 15 percent or less.
Benefits
Calculate how much you will have to pay out of pocket for a typical expense and how much the warranty will pay for the expense. You can do this by taking the total cost of the expense and multiplying it by the percentage that the warranty does not cover. For example, if a warranty covers 75 percent of a $500 repair job, then your out-of-pocket expense will be 25 percent of the repair job or, in this case, $125 ($500 x 0.25 = $125).
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