Extended Warranty Repost
11-19-2002, 07:29 AM
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Extended Warranty Repost
Hope this helps some of you who are looking at warranties...
As the inevitable end-of-warranty mileage creeps up on your Audi, you have probably considered an extended warranty to protect you against the potentially insane repair costs associated with used Audis.
I can share some thoughts I've had in the process of buying warranties for my own cars, and also using the warranties for claims. I've had two Audis with extended warranties. Between them, I invested about $2,100 in warranties, and got about $3,000 in repairs covered, over a total of about 75k covered miles. So for me, warranties paid off... now that my cars have over 100k miles and paid off, I'm not as worried about having a warranty.
There are two types of warranties for used cars: Parts included, for cars with less than 1,000 miles left on original factory warranty, and parts excluded ("Bumper-to-Bumper") for cars with more than 1,000 miles left on original factory warranty.
To explain each in simple terms...
A parts included contract will cover only parts that are specifically mentioned in the contract as covered. When you consider how many parts your car has, only a fraction of the hundreds of possible problems are covered. However, the big things will probably be covered. Engine, transmission, tubos, steering, air conditioning, etc. I've seen very complex parts included contracts, that go as far as covering O2 sensors and gaskets, and some contracts that will cover major failure of the engine or transmission only.
In reality, you're going to see some (possibly great) benefit from parts included coverage; that's what I got for both of my cars and came out $900 ahead. But, you need to review covered items and the contract's language very carefully before putting your money in a contract that only covers listed parts. Coverage terms for parts included warranties usually start 1,000 miles after you buy the contract, and go for 12-48 months, with mileage coverage of 12k-60k, depending on the term. So, if your car has 60k, and you buy a 36/40k contract, you'll have coverage through 100k. FYI, the AudiAssured program is a parts included coverage plan, not simply an extension of the original warranty. It leaves many holes for repair costs. I know this because I had an AudiAssured warranty that was basically of no use to me. You can expect to pay between $800 and $2,500 for a parts included contract, depending on the car, age, mileage, and complexity of coverage.
Parts excluded coverage on the other hand, is going to be similar to a factory warranty, and cover everything except what is listed as "not covered". Items not covered will be all the wear items (brakes, belts, tires, all trim, exhaust system, etc), which usually will be a part of your regular maintenance. Parts excluded contracts usually start from the original in-service date of your vehicle, and cover your car until it is 5-10 years old, or has 60-100k miles. You can expect to pay $1,200-$3,000 for a parts excluded contract.
Obviously, parts excluded coverage is preferred in terms of what the contract will cover. They are more expensive, but that's not really a drawback when you consider the coverage.
Deductibles are normal, in the amounts of $25, $50, or $100. Usually they will want to add $100 to the contract to wipe out the deductible, if they'll do that at all. Remember, if you have 5 claims at $50, that's $250 more, vs $100 to wipe it out. Your choice. I don't regret paying $100 more for $0 deductible.
After you decide IF you want to buy an extended warranty, and what coverage you are going to look for, is when the fun starts. While the concept is simple, remember who you're dealing with here... insurance companies. A fair percentage of their efforts as a company go towards trying to find excuses to deny, delay, or not pay a claim. I've never had a covered part claim denied, though.
If you're looking online for an extended warranty, you are going to find dozens of options. Some are going to be easy throw-aways when you see their pricing or coverage is out of line, or they don't cover your car, or vehicles in your state. But after a few hours of searching and calling, you'll have 3-5 options opened.
Most online warranty sellers are simply sales agents who sell a policy from a national insurance company. In cases, the agency will just be a division of the parent insurance company. No real major drawback to that, since regardless of who you buy from, there's going to be a salesperson on the other end of the line, working on commission, telling you why their warranty is the best. Just because the salesperson is great, doesn't mean the warranty is great.
You will want to make sure the PARENT company is going to be around. Is it a company you have heard of? Whoever provides your car insurance might also provide extended warranties. These companies will most likely be around to honor the warranty. For example, I had an extended warranty and car insurance with Royal-Sunalliance. They were a dream warranty company. I made friends with the claims adjuster; they always paid in a timely manner, and didn't make me feel at all like just another big insurance company was jerking me around.
If you haven't heard of the company, do as many searches for information on them as you can. Ask the selling agent as many questions (including "tell me about xyz company") about them as you can think of. If you're at any point unsure of this company, or read something bad about them (use your own judgment on what is a genuine complaint, and what is an irate customer who wants them to cover something outside of the contract), then move on to another company you do feel comfortable buying from. Do your usual BBB checks, if you value the ratings of such agencies.
Some companies will want to do a pre-contract inspection of your car, but this isn't all that common. I had one done on my 100CS, to have the 1,000-mile "grace period" waived. Since they use independent inspectors, your guess is as good as mine as to whether the inspector will be friendly or not... mine was.
The actual purchase of the contract is pretty simple. They'll collect your information, and VIN, run a carfax on your car, etc. For me, they just connected name, address, phone, and a credit card number. Most companies offer installment payments---3, 6, 9, or 12 equal payments without interest.
Just as important as the company behind the warranty, the coverage, and the sales agency, is the actual claims process. Now, here's where things get sticky. Some dealers or repair shops simply won't deal with third party warranty companies, because they don't want to waste the time talking to a claims adjuster, trying to convince them of the repair, and so on. If that's the case, the responsibility to get your repair covered falls on you.
With my warranties, I basically did a lot of hand holding of both my repair shops and the claims department. Sometimes I'd have to call in to make a claim or check on a claim; sometimes they would actually deal with my repair shop.
When you go to buy your contract, it's going to be blue skies and the "never think about it" type of pitch. The contract itself isn't going to mention how they pay the claims, but just that they will reimburse you. Nowhere does it say whom they will pay, when, or by which method. Are they going to pay your repair shop by "corporate credit card?" Or are they going to "cut your a check?" Maybe they'll just "pay the repair shop before the repair is completed!" Regardless, they will make sure you know that you have to get a claims authorization number before any repair is done.
How do you lock them into a certain payment method or process? I don't think you do. The contracts are set in stone, and you're not going to get an addendum attached, and you're certainly not going to get a line of it changed. You can only hope that they will pay your shop by credit card, or if that fails, pay you by check in a timely manner.
In my experience, each claim was different. First, they told me they changed their policy from paying by credit card, to paying by check. Next time, it was the other way around.
Either way, your repair shop isn't going to repair your car, give you the keys back, and wait for a check from an aftermarket warranty company. So, you can either pay your repair shop, take your car, and wait for the warranty money, or you can wait until he money arrives, to have the repair done.
So, the payment issue isn't the end of the world, but you should understand going in to a contract with a warranty company, that you might have to <i>deal with</i> getting paid. You might have to fax an invoice to the claims department, nag them by phone, or something to that effect. (Oh yeah, make sure everything on the invoice matches your contract exactly... they love delays.)
I mentioned earlier about insurance companies employing many people whose job it is to try to deny claims. If a claims adjuster can extract enough information out of you or your mechanic to justify denying the claim in accordance with the terms of the contract (or based on terms not in the contract), they will.
This is much more of an issue with parts included coverage, as opposed to parts excluded, but it does apply to both.
An example being, the contract might state that a part (say, suspension control arm bushing) is covered, but the fact that it is squeaking and not clunking might easily give them reason to deny the repair due to the squeaking being from normal wear and tear, which is of course excluded from the contract. Whoever calls for a claims authorization number has to be very careful of their choice of words.
Also of course, you want to check the contract's guidelines for what type of maintenance you are required to perform to maintain the warranty coverage. In the event of a major failure, you may (will) be required to produce documentation of such maintenance. Additionally, I have heard of insurance companies sending out technicians to inspect a repair before authorizing, if it is expensive enough to justify one last ditch effort at denying coverage. This is routinely done with manufacturer warranties as well, if a major part fails. Definitions of these types of things would be nice to see in a contract, but I doubt you'll ever find a contract stating something along the lines of "we'll do everything we can to deny your coverage."
Other things to look for in the coverage section are restrictions on things like turbos or superchargers if equipped, factory-installed trailer hitches, alarms, and other options.
Also, parts damaging other parts is a tricky area that can leave you with expensive repairs not covered by the warranty. Say an abnormally worn and loose timing belt snaps or skips, and although replacing the belt might cost $200, the failure left the engine with bent rods and damaged valves (maybe more), and $3,500 in damage. Even if you have performed your timing belt service in accordance with the contract's maintenance guidelines, does the warranty cover all that the timing belt "took with it", or just the belt? Your sales person probably won't know the answer to this. While you're at it, read the "only covered if" parts of the contract real carefully.
This is of course, thinking of the potential problem spots, and trying to give you some information that might help you avoid them. Many people buy contracts, have a problem that isn't covered, and expect the warranty to cover it.
Do your homework, and carefully think over the entire decision before buying. Use your best research and evaluation skills, and you should be just fine... and covered under warranty.
As the inevitable end-of-warranty mileage creeps up on your Audi, you have probably considered an extended warranty to protect you against the potentially insane repair costs associated with used Audis.
I can share some thoughts I've had in the process of buying warranties for my own cars, and also using the warranties for claims. I've had two Audis with extended warranties. Between them, I invested about $2,100 in warranties, and got about $3,000 in repairs covered, over a total of about 75k covered miles. So for me, warranties paid off... now that my cars have over 100k miles and paid off, I'm not as worried about having a warranty.
There are two types of warranties for used cars: Parts included, for cars with less than 1,000 miles left on original factory warranty, and parts excluded ("Bumper-to-Bumper") for cars with more than 1,000 miles left on original factory warranty.
To explain each in simple terms...
A parts included contract will cover only parts that are specifically mentioned in the contract as covered. When you consider how many parts your car has, only a fraction of the hundreds of possible problems are covered. However, the big things will probably be covered. Engine, transmission, tubos, steering, air conditioning, etc. I've seen very complex parts included contracts, that go as far as covering O2 sensors and gaskets, and some contracts that will cover major failure of the engine or transmission only.
In reality, you're going to see some (possibly great) benefit from parts included coverage; that's what I got for both of my cars and came out $900 ahead. But, you need to review covered items and the contract's language very carefully before putting your money in a contract that only covers listed parts. Coverage terms for parts included warranties usually start 1,000 miles after you buy the contract, and go for 12-48 months, with mileage coverage of 12k-60k, depending on the term. So, if your car has 60k, and you buy a 36/40k contract, you'll have coverage through 100k. FYI, the AudiAssured program is a parts included coverage plan, not simply an extension of the original warranty. It leaves many holes for repair costs. I know this because I had an AudiAssured warranty that was basically of no use to me. You can expect to pay between $800 and $2,500 for a parts included contract, depending on the car, age, mileage, and complexity of coverage.
Parts excluded coverage on the other hand, is going to be similar to a factory warranty, and cover everything except what is listed as "not covered". Items not covered will be all the wear items (brakes, belts, tires, all trim, exhaust system, etc), which usually will be a part of your regular maintenance. Parts excluded contracts usually start from the original in-service date of your vehicle, and cover your car until it is 5-10 years old, or has 60-100k miles. You can expect to pay $1,200-$3,000 for a parts excluded contract.
Obviously, parts excluded coverage is preferred in terms of what the contract will cover. They are more expensive, but that's not really a drawback when you consider the coverage.
Deductibles are normal, in the amounts of $25, $50, or $100. Usually they will want to add $100 to the contract to wipe out the deductible, if they'll do that at all. Remember, if you have 5 claims at $50, that's $250 more, vs $100 to wipe it out. Your choice. I don't regret paying $100 more for $0 deductible.
After you decide IF you want to buy an extended warranty, and what coverage you are going to look for, is when the fun starts. While the concept is simple, remember who you're dealing with here... insurance companies. A fair percentage of their efforts as a company go towards trying to find excuses to deny, delay, or not pay a claim. I've never had a covered part claim denied, though.
If you're looking online for an extended warranty, you are going to find dozens of options. Some are going to be easy throw-aways when you see their pricing or coverage is out of line, or they don't cover your car, or vehicles in your state. But after a few hours of searching and calling, you'll have 3-5 options opened.
Most online warranty sellers are simply sales agents who sell a policy from a national insurance company. In cases, the agency will just be a division of the parent insurance company. No real major drawback to that, since regardless of who you buy from, there's going to be a salesperson on the other end of the line, working on commission, telling you why their warranty is the best. Just because the salesperson is great, doesn't mean the warranty is great.
You will want to make sure the PARENT company is going to be around. Is it a company you have heard of? Whoever provides your car insurance might also provide extended warranties. These companies will most likely be around to honor the warranty. For example, I had an extended warranty and car insurance with Royal-Sunalliance. They were a dream warranty company. I made friends with the claims adjuster; they always paid in a timely manner, and didn't make me feel at all like just another big insurance company was jerking me around.
If you haven't heard of the company, do as many searches for information on them as you can. Ask the selling agent as many questions (including "tell me about xyz company") about them as you can think of. If you're at any point unsure of this company, or read something bad about them (use your own judgment on what is a genuine complaint, and what is an irate customer who wants them to cover something outside of the contract), then move on to another company you do feel comfortable buying from. Do your usual BBB checks, if you value the ratings of such agencies.
Some companies will want to do a pre-contract inspection of your car, but this isn't all that common. I had one done on my 100CS, to have the 1,000-mile "grace period" waived. Since they use independent inspectors, your guess is as good as mine as to whether the inspector will be friendly or not... mine was.
The actual purchase of the contract is pretty simple. They'll collect your information, and VIN, run a carfax on your car, etc. For me, they just connected name, address, phone, and a credit card number. Most companies offer installment payments---3, 6, 9, or 12 equal payments without interest.
Just as important as the company behind the warranty, the coverage, and the sales agency, is the actual claims process. Now, here's where things get sticky. Some dealers or repair shops simply won't deal with third party warranty companies, because they don't want to waste the time talking to a claims adjuster, trying to convince them of the repair, and so on. If that's the case, the responsibility to get your repair covered falls on you.
With my warranties, I basically did a lot of hand holding of both my repair shops and the claims department. Sometimes I'd have to call in to make a claim or check on a claim; sometimes they would actually deal with my repair shop.
When you go to buy your contract, it's going to be blue skies and the "never think about it" type of pitch. The contract itself isn't going to mention how they pay the claims, but just that they will reimburse you. Nowhere does it say whom they will pay, when, or by which method. Are they going to pay your repair shop by "corporate credit card?" Or are they going to "cut your a check?" Maybe they'll just "pay the repair shop before the repair is completed!" Regardless, they will make sure you know that you have to get a claims authorization number before any repair is done.
How do you lock them into a certain payment method or process? I don't think you do. The contracts are set in stone, and you're not going to get an addendum attached, and you're certainly not going to get a line of it changed. You can only hope that they will pay your shop by credit card, or if that fails, pay you by check in a timely manner.
In my experience, each claim was different. First, they told me they changed their policy from paying by credit card, to paying by check. Next time, it was the other way around.
Either way, your repair shop isn't going to repair your car, give you the keys back, and wait for a check from an aftermarket warranty company. So, you can either pay your repair shop, take your car, and wait for the warranty money, or you can wait until he money arrives, to have the repair done.
So, the payment issue isn't the end of the world, but you should understand going in to a contract with a warranty company, that you might have to <i>deal with</i> getting paid. You might have to fax an invoice to the claims department, nag them by phone, or something to that effect. (Oh yeah, make sure everything on the invoice matches your contract exactly... they love delays.)
I mentioned earlier about insurance companies employing many people whose job it is to try to deny claims. If a claims adjuster can extract enough information out of you or your mechanic to justify denying the claim in accordance with the terms of the contract (or based on terms not in the contract), they will.
This is much more of an issue with parts included coverage, as opposed to parts excluded, but it does apply to both.
An example being, the contract might state that a part (say, suspension control arm bushing) is covered, but the fact that it is squeaking and not clunking might easily give them reason to deny the repair due to the squeaking being from normal wear and tear, which is of course excluded from the contract. Whoever calls for a claims authorization number has to be very careful of their choice of words.
Also of course, you want to check the contract's guidelines for what type of maintenance you are required to perform to maintain the warranty coverage. In the event of a major failure, you may (will) be required to produce documentation of such maintenance. Additionally, I have heard of insurance companies sending out technicians to inspect a repair before authorizing, if it is expensive enough to justify one last ditch effort at denying coverage. This is routinely done with manufacturer warranties as well, if a major part fails. Definitions of these types of things would be nice to see in a contract, but I doubt you'll ever find a contract stating something along the lines of "we'll do everything we can to deny your coverage."
Other things to look for in the coverage section are restrictions on things like turbos or superchargers if equipped, factory-installed trailer hitches, alarms, and other options.
Also, parts damaging other parts is a tricky area that can leave you with expensive repairs not covered by the warranty. Say an abnormally worn and loose timing belt snaps or skips, and although replacing the belt might cost $200, the failure left the engine with bent rods and damaged valves (maybe more), and $3,500 in damage. Even if you have performed your timing belt service in accordance with the contract's maintenance guidelines, does the warranty cover all that the timing belt "took with it", or just the belt? Your sales person probably won't know the answer to this. While you're at it, read the "only covered if" parts of the contract real carefully.
This is of course, thinking of the potential problem spots, and trying to give you some information that might help you avoid them. Many people buy contracts, have a problem that isn't covered, and expect the warranty to cover it.
Do your homework, and carefully think over the entire decision before buying. Use your best research and evaluation skills, and you should be just fine... and covered under warranty.
11-19-2002, 01:41 PM
#6
Not to pick nits, but in the 8th par., did you mean, "parts EXCLUDED..
coverage, on the other hand ... and cover everything except what is EXCLUDED? Or am I just being stupid (in which case I apologize)?
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11-20-2002, 09:53 PM
#8
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Re: This one is new.
Thanks for the tips...
I just bought this 99 A6 from a local Audi dealer. Only 2 months after the purchase I have to chuck out $1000 worth of repair. The car needed to replace the ? arms for both side (squeaks sound). The main digital display starting to loose some pixel. Got a burn smoke smell if the car is left running for a long period. I think I got a lemon. Thinking of getting an extended warranty.
I just bought this 99 A6 from a local Audi dealer. Only 2 months after the purchase I have to chuck out $1000 worth of repair. The car needed to replace the ? arms for both side (squeaks sound). The main digital display starting to loose some pixel. Got a burn smoke smell if the car is left running for a long period. I think I got a lemon. Thinking of getting an extended warranty.
The car has 73K miles on it when I purchase it. This is my first German car which I quickly learn.
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