I am often asked by friends and business associates for advice on buying a vehicle protection plan and what to look for. Here are a few ideas.
My advice is the same as it would be for buying any product or service. Do a little homework! Knowledge is power and will translate into a happy buying experience and not leave you with buyers remorse down the road.
A vehicle protection plan is a piece of paper that promises to pay for your covered repairs should something break on your vehicle.
How much does it cost?
Who makes the promise?
What are they agreeing to pay for?
Do I buy from dealer/manufacturer or third party like Autopom?
For most of us this is the big question and may determine whether or not we purchase a vehicle protection plan or a vehicle service contract.
Do not buy from the first company from whom you get a quote. Check out at least three. You might be surprised at the price difference. Remember to compare apples to apples. If one company is quoting basic drive train coverage and another exclusionary coverage with few exclusions it is not a fair comparison.
You work hard for your money. A little time spent researching and comparing can save you hundreds if not thousands of dollars. Not a bad return on your time invested.
The vehicle protection plan landscape is littered with the bones of failed companies who tried to be successful in this business. Some died because they were bad business people. Some because they were dishonest and took the money and ran. Some have survived and prospered providing millions of consumers with valuable protection and peace of mind.
How do you know the good ones from the bad? That piece of paper you get, a contract, is backed by someone. Make sure it is at least an "A" rated carrier by A.M. Best. You can easily check by going to www.ambest.com and entering the company name. Do this before you buy! Also demand a sample contract. Any company worth it's salt will gladly provide one for you.
Next find out how long the company has been insuring or underwriting this type of business. Obviously the longer the better, as this indicates stability.
One lists all the parts that are covered and can range from very basic and minimal to an extensive list covering almost everything.
The other is a named exclusion contract and lists only the things that are not covered. Simply stated if it's not excluded it is covered. Generally these are the most comprehensive contracts.
Again demand to see the contract and review the list of covered or excluded parts. The more expensive and high-tech your vehicle, the more you should probably favor the exclusionary coverage. This would be my advice. Some companies also provide a "high-tech" option to cover navigation systems and other electronic/computer devices. Ask about them and how much that coverage will add to your cost.
Dealer/Manufacturer extended vehicle warranty
Third-party vehicle protection plan or vehicle service contract
Only a dealer through a manufacturer program can sell an extended vehicle warranty. Only the manufacturer can truly "warrant" the many components that make up a vehicle. All others, including Autopom, offer a vehicle protection plan or vehicle service contract with several notable exceptions. In California for example, third parties are required to sell mechanical breakdown insurance. An actual insurance contract between you and an approved insurance comapny.
Dealer offered coverage is attractive because you can complete the total transaction in one place and probably include the cost of your coverage with your auto payment. Several reasons you may not want to choose this option:
Not all dealers sell a manufacturers extended vehicle warranty (many sell the same programs as Autopom).
You may be required to return the vehicle to the dealership or a similar dealership to obtain repairs. This may be inconvenient or you may have your own favorite independent mechanic.
Dealer / manufacturer contracts are typically more expensive.
Recently many dealers have gone out of business.
Quality third party providers (like Autopom) offer payment plans with no fees and many other benefits.
My advice on buying a vehicle protection plan or vehicle service contract is to do your homework. Compare coverage, price, and underwriter and you will be happy for many years to come. Who doesn't want peace of mind? Let us know if we may be of service.