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Some dealers do mark up their prices over the suggested retail of an extended warranty plan. Just like additional dealer markup (ADM) on vehicles, the difference is that ADM is posted on the vehicle. You never know when the dealer is giving you suggested retail or their own higher price for a warranty. It's best to ask them straight out, then double check prices with another dealer. Why not try to negotiate a better price on the extended warranty, just like you did on the vehicle? After all, you are an Edmunds.com reader.
Autobytel - Online Automotive Guide. Car Quotes, Comparisons and More
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Autobytel - Online Automotive Guide. Car Quotes, Comparisons and More
What exactly is covered? Know what's covered -- and what's not covered -- by the extended warranty you're considering. Does the service contract cover breakdown as well as wear and tear? Under a "breakdown" warranty, coverage is extended only to parts that break. Such a policy can prove less inclusive than is desirable, since not all parts fail due to breakage. Some need to be replaced because they've worn down over a period of time; a "wear-and-tear" warranty extends coverage to worn-down parts in need of replacement. Additionally, some "entry level" contracts don't cover ABS brakes, so if your vehicle has this feature, you should consider upgrading to this level. And overheating -- regardless of its cause -- isn't covered in many warranties. Thus, if overheating occurred due to problems with an expensive part such as your radiator, you'd be stuck with a hefty repair bill. Before committing to a warranty, take the time to fully explore the ins and outs of its coverage implications. The distinctions between the various plans might seem slight, but they can prove quite important.
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