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Extended Warranty Basics Part 2 - Pros & Cons

  • 31 October 2018
  • Author: Kaitlyn
  • Number of views: 60
  • 0 Comments

When talking about something that is several thousands of dollars and a single repair can have a devastating effect on the bank account.

Heavy Truck manufacturing is quite unlike auto manufacturing or any other highly controlled manufacturing process. On any given day, any manufacturer can produce a Truck that is substandard in one or more of many areas. It doesn’t matter what type of Truck or how much the Truck costs, all manufacturers occasionally make mistakes.

Not only that, but the manufacturers substitute or change components all the time. The components in the same exact Truck models may be different due to a shortage from one supplier, a change in component pricing, an engineering decision, etc.

Reasons To Purchase

Peace of Mind – Answering the following questions may help determine if “peace of mind” is a major factor for you.

  • Do you hate surprise expenses, especially costly Truck repairs?
  • Would you sleep better at night knowing that certain major repairs will be covered under an extended service contract? Or would you rather risk it and pay for repairs when and if they are needed?

Again, the Truck manufacturing process is different. There is a tremendous amount of human involvement. Truck factories aren’t full of computer programmed robots with precise processes. And humans make mistakes.

Budget Control – We use insurance to manage the risks of major financial outlays in our lives. Extended service contracts can take on that role as far as Truck repairs go. More questions for you.

  • Do you have a few thousand dollars tucked away in an emergency fund for just these kinds of expenses?

An extended warranty is also somewhat of a hedge against rising prices. The warranty company will pay retail prices at the time of the repair, but the warranty Buyer can be insulated from those price increases. In other words, once you purchase a contract, the Administrator can’t come to you in year three asking you for more money because prices have gone up.

Resale Value – This isn’t necessarily a major reason to have an extended service contract, but it certainly provides a seller with an advantage and it provides a buyer of a used Truck with some peace of mind.

Repair Experts – Though most people don’t think of a warranty Administrator as looking out for their best interests, it is true that Administrators provide “checks and balances” that ensure repair facilities are not overcharging.

Reasons NOT To Purchase

These are reasons NOT to buy an extended service contract.

You will be disappointed and upset if you buy an extended warranty to:

  • To cover regular maintenance items
  • To cover pre-existing items (repairs needed before the service contract is purchased)
  • To fill gaps in your vehicle collision and/or comprehensive insurance
  • To provide roadside assistance (though extended warranties do have some roadside assistance coverage, it’s not a primary part of the contract and specialized Trucking roadside assistance plans are much better)
  • To cover rust, corrosion, or poorly maintained vehicles

Reasons You May Not Be Able To Get An Extended Warranty On A Used Heavy Duty Truck.

  • Your Truck has too many miles (Most companies will write new contracts on Trucks with mileage up to 750,000 miles; for some companies the limit is 600,000 miles.
  • Your Truck is too old (Most companies have age limits for coverage) – Coverage may be available for Trucks up to 10 years.
Next week we will be talking about buying Extended Truck Warranty and what to look for. If you missed part 1 of the series, click here to read.
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