Auto Warranty Companies and Brokers

As more consumers learn that there are alternatives to the high price of dealer sold extended warranties, the number of companies and web sites offering them has exploded.

How do you know which auto warranty companies you can trust? How can you research the companies? What resources are available to you?

Warranty Brokers
In most instances, the company will be a broker offering car warranty coverage(s) from regional, third-party warranty administrators.

Once the warranty is sold, you will not deal with the seller again. You want to make sure the seller remits payment to the warranty administrator and your extended auto coverage is in force.

Warranty brokers typically look for the cheapest coverage available so their markups can be higher. Often, they are not concerned with the quality or level of car warranty coverage. As they frequently change the companies they represent, they do not develop long-term business relationships that are most beneficial to consumers.

Warranty Administrator
This is the company that actually issues the extended car warranty and is responsible for paying any claims.

This is the company that should come under the closest scrutiny by consumers. Buying extended auto warranty coverage direct from an administrator offers the most security as your money goes directly to the company responsible for fulfilling the obligations under the warranty contract.

You will also be able to obtain the same car warranty coverage they sell through dealers and avoid the car dealer’s markup.

Administrators will offer you pre-sale counseling and after sale support. There are many car warranty administrators (national and regional) with varying business models. You should select a company that offers their extended vehicle coverage through many different channels and not just the Internet.

Very few warranty sellers are direct administrators of their extended car warranty coverage.

Buying direct from an administrator is valuable because you know where your money is going. You continue the affiliation with the company all the way through the life of your extended car warranty; in other words, the direct administrator will sell you coverage, provide customer service, offer financing and handle all your claims.

Buying direct from an administrator also makes it easier to properly research the company that will be responsible paying for your car repairs over the next 3, 4, 5 years or longer.

More and more states are regulating the sale of extended auto warranties. Larger states like California, Florida and New York have licensing requirements and have done the homework for you.

If a company is licensed in all of these states, that is a good indication of a stable company and one dedicated to compliance.