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5 Extended Warranty Tips

        Auto | Buying & Selling

2. Choose a Provider

­There are three basic organizations that offer extended warranties: automobile manufacturers, new and used car dealerships, and independent companies or third parties. As usual, it is up to the consumer to decide which is best for their circumstances, but here are a few of the pros and cons of each provider.

Manufacturer

  • Pros: Factory-backed dealer repair network nationwide. No haggling about repair, price, or components.
  • Cons: Highest upfront costs, and dealer network might be limited in your area.

Dealer

  • Pros: Lower up-front cost: buy plan and service car at the same place.
  • Cons:Usually only one service point. If they can't fix it, who do you call?

Independent

  • Pros: Lowest cost (usually between 30-50 percent less than manufacturer plans), most coverage choices, dealers, or local repair shops. Third-party warranty programs are usually their only business.
  • Cons: Repair shop coverage might not be as promised. Some are "here today, gone tomorrow" companies.

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