Monday, September 08, 2008

How Extended Auto Warranty Eligibility Is Determined

The 10 - 120k Rule: So... you've been shopping around for an extended warranty for your car or truck and you are more confused than ever. One company has offered you a fair price and a 36,000 add-on mile plan. Another company offered you a better price, but only 24,000 miles - but they include towing and trip interruption insurance. The last company offered five years and 100,000 miles at an even lower rate. It's tempting to go for the longest time and most miles, but it may not be the smart decision and here is why.

There is a rule of thumb as a reputable extended warranty company. The actuaries, they are the "bean counters" who study the repair history of all makes and models and then set the rates. These experts want the full-service plans to end either on the 10th birthday of the vehicle or somewhere around 120,000 miles. Every reputable company in the country follows this rule. Any company that breaks this basic rule is courting disaster and may not be around when you need them.

There is nothing wrong with searching for the lowest priced auto warranty quotes online and you definitely need to compare coverage; but beware when it sounds just a little too good to be true. It probably is...