Are you considering utilizing a warranty service like Endurance, Car Shield, or Toco for your vehicle? Many people want peace of mind when it comes to unexpected repairs, but it's essential to weigh the benefits and drawbacks. Here's a roundup of the top pros and cons to help you make an informed decision:
Pros:
By opting for a warranty service, you can protect yourself from costly repairs that may arise unexpectedly, providing financial security and lower stress when breakdowns occur. Budgeting a small amount monthly is sometimes easier than paying a large bill down the road.
Enjoy the convenience of having a warranty service handle the administrative work and repair process, saving you time and effort. Your warranty company will talk all of the logistics and payments over with your repair shop for you. All you will have to do is approve service when they tell you the portion of the bill you are responsible for.
Benefit from a range of coverage options tailored to suit your specific needs and budget, ensuring comprehensive protection for your vehicle. Most warranty services offer different levels of coverage that include and exclude some repairs.
Cons:
While warranty services offer financial protection, the initial cost of enrolling in a service, and the waiting period before full coverage begins, can be a concern for some individuals.
Be aware of any limitations or exclusions in the warranty agreement, as certain repairs or components may not be covered, leading to unexpected out-of-pocket expenses if you aren't well informed about your policy. For example, routine maintenance like brake pads, rotors, shocks, struts, and oil changes, filters, and wipers are often excluded from coverage.
Relying on a warranty service for all repairs may limit your flexibility in choosing where and how your vehicle is serviced, potentially restricting your options. Dicky's Doghouse has been able to work with all warranty companies we've encountered so far, but because of the logistics involved, there are many repair shops that, understandably, will not.
Some warranty services may have a complex or time-consuming claims process, causing delays in getting your vehicle repaired promptly. Repairs that might have been done in one day can be pushed back for a week or two depending on how long approval takes, whether an inspector has to come out, and how packed the rest of the shop's schedule is.
To give you an idea of how this process works, we have briefly described our recent experiences with two customer claims.
Example 1:
A customer comes into our shop for diagnosis and repair and informs us that they have a vehicle warranty service. Our technician spends time diagnosing the problem to be a fuel pump, for a $150 diagnostic charge. The Service Advisor spends an hour off and on the phone with the warranty repair company, answering all of their questions about the vehicle and the diagnosis process. We give them our estimate of $850 for the fuel pump. The company informs us that the amount they will cover towards labor (they use their own labor guide or labor rate), and how much they will cover towards parts (they use their parts guide) is only $550. Though we ask, they do not cover the diagnostic fees or shop supplies involved. They also do not cover the cost of the oil change that is required because the faulty pump leaked fuel into the oil. This time they changed their mind and did not require their own inspector to come out and confirm the diagnosis. After this process, and getting the go ahead from the customer, we got the vehicle back on the schedule for the next available appointment. After service is complete, the warranty service will pay us the agreed upon amount, minus the customer's $100 deductible for a total of $450 on an $1100 bill. Then the customer pays us the remaining $650 to cover the deductible, diagnostics, labor, parts, and supplies that were not covered by the warranty service.
In the above example, we could have gotten the fuel pump replaced that same day, but with the time involved with the warranty company, it had to be rescheduled, leaving the customer without their vehicle for longer than originally anticipated. If there are further problems found once we get the car running again (which is a very likely scenario), the whole process will start again.
These customers did find the $450 savings worth it since they had already paid for the warranty service. Would they, however, have chosen this service and its monthly fee knowing what they know now? We don't know the answer to that, because there are so many things that go into these decisions, but we do know that we want all of our customers to be informed about the process that their own claims will go through if they choose to work with a warranty company.
Example 2:
A customer comes into our shop for diagnosis of why their vehicle will not go over 35mph. We diagnose that there are metal shavings in the transmission, and a new one is needed. We begin the process of talking with their warranty company. The company wants us to use their transmission that has a 12-month, 12,000 mile warranty. We do not install parts that are provided to us, because we always honor our warranty, and the transmission we will install comes with a 36-month, unlimited mile warranty that is much better for our customer. They approve our part, but the customer must pay the difference between their price and ours. The company also does not cover the oil-cooler line that needs to be replaced. All told, the company pays us $4400 on a $5700 invoice, leaving the customer to pay the remaining $1300 (which includes his deductible) out of pocket.
This was his first claim with them, and it is great that he does not have to pay the full price of the repair. His warranty costs him a little over $100/month. How long did he pay into this warranty before using it? If he has paid for several years, does he come out ahead or not? We do not know the answers to those questions, either, but we do know that we want our customers to know about potential extra costs that their company will not pay so that they can make informed decisions.
In conclusion, opting for a warranty service like Endurance, Car Shield, Toco, or others has its merits and drawbacks. It's crucial to consider your priorities, budget, and preferences when deciding if such a service aligns with your needs. Remember, every vehicle owner's situation is unique, so weigh these pros and cons carefully before making a decision.
Feel free to share your thoughts on using warranty services like these. Your insights and experiences are valuable in helping others make informed decisions about their vehicle maintenance and protection!
Comments