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Extended Warranties Are Usually Worthless

By: Karl W. Heinzel

People purchase extended warranties are lots of consumer products including automobiles. Chances are you're never got to get your money out of your investment. As a matter of fact, extended warranty is arn't really even extended warranties at all. A more accurate name for them is a service contract. these contracts are usually sold as an add-on sale at the time of purchase. Through these service contracts, you end up paying a separate warranty company, an upfront fee to cover repairs that may show up in the future.

Car Dealers try to scare you into purchasing a service contract for your peace of mind after your factory warranty expires. This is because service contract sales are a huge profit maker for a car dealer. Typically, 50% or more of the selling price goes to the dealer as the seller. However, rarely do these "Extended Warranties" provide you with the protection that you are led to believe they have and would expect.

Usually these contracts don't cover the following:

Are you lacking, vehicle maintenance records? If you fail to produce records proving that the regular maintenance schedule was followed your in trouble. Not just maintaining the vehicle, but proving that the vehicle was maintained. Without proof you're not covered.

What about wear and tear? Parts in your car that normally wear out, such as brake shoes, and gaskets, shock observers, and even belts are usually not covered. These are considered normal maintenance items and are expected to wear out as your vehicle is used. Usually, no coverage here.

Failure of a Non-Covered Part? Repairs which are needed to cover a part caused by the failure of a non-covered part are excluded from coverage. This means that if a wear item such as a hose or gasket fails and this causes a major engine failure, the engine repair will not be covered.

"Exploratory surgery" . In most cases, there is a fair model labor involved in discovering what the problem is and this will only be covered if the problem turns out to be a covered part. Otherwise you'll end up stuck with the bill. In the garage may not even start on the work until you paid for the labor front.

Limited Choice of Repair Facilities?Many people also encounter difficulties in obtaining repairs for their vehicles because the service contract restricts the choice of repair facility. These agreements will require you to have your vehicle repaired at a specific or limited number of repair facilities. Sometimes, due to an Administrator's track record, a repair facility will not honor the service contract and instead insist on payment from the consumer, leaving you to try and get reimbursed from the administrator.

With all of the above hurdles, it is hard to imagine receiving any peace of mind if you actually need to use your service contract. Additionally, with the quality of today's vehicles the odds of needing a major repair during the first six years of your car's life are slim. The bottom line is to save your money. In most situations you will be farther ahead monetarily and have greater peace of mind by saving your money for a rainy day.

Article Source: http://directoryjam.com

Karl & his partners cover consumer legal topics such as Warranties & Auto Issues at lemonlawyer.wordpress.com They specialize in California Lemon Law topics & are lemon law attorneys for southern California

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