Is Auto Repair Insurance Beneficial?

Insurance providers offer auto repair insurance to all the buyers, but the car owners should review all the terms and conditions before purchasing insurance.

FREMONT, CA: Auto repair insurance is a service contract to protect you from expensive car repair bills. These insurances cover certain parts of your vehicle, which is specified by the provider while choosing your plan. In case of any damage or breakdown, the owner can contact the repair insurance provider to file a claim.

What is Auto Repair Insurance

Auto repair insurance is a facility offered to the buyer by the car dealers to fix minor and major mechanical failures due to normal wear on your car. The level of insurance changes from provider to provider. Most of the insurances come through the insurance agencies as an add-on service to your existing car insurance policy. Some companies offer protection as a rider to the current policy and some as a separate plan completely.

This policy is beneficial for the people who are using a new car with low-mileage and want to make sure an unexpected breakdown is covered. Auto Repair Insurance will cover the damages and will provide free service for the owner.

Generally, auto repair insurance is pocket-friendly because it costs between 50 USD to 1,000 USD per year, depending on the age of vehicle, mileage, and level of repair insurance. The owners can save money by enrolling in this policy.

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Pros

• Customizability: The car dealers offer different types of warranties according to different needs. The customers can choose and customize the service according to their needs.

• Fixed Price: Auto repair insurances have fixed pricing so that the customer can set it with the monthly car payment without any hassle.

• Used Car Coverage: Most pre-owned cars are sold either as-is or with a very limited 3-month warranty. Some of the warranty providers offer to cover any car, even if the customer is not the first owner. The other advantage is that these providers keep a record of a car from the time of purchase, so the second owner can quickly gather all those information from them.

• Refund of Unused Portions: Some of the dealers refund the unused amount at the end of the term. Customers can use that amount for some other purposes.

Cons

• Exclusions: Not all the auto repair insurances are the same; all have different terms and conditions. Some of the policies do not cover all damages caused and excludes some of them. In this case, the buyer should review all the terms and conditions before buying the insurances.

• Expense: Most of the cars are built to last over 200,000 miles if they are correctly maintained. Auto repair warranties do not cover the necessary maintenance items, and the owners have to pay extra for the unexpected repairs all the time. It means that the extended warranties will increase the expenses.

• Repair Facility Limitations: There are certain limitations regarding the repair facility. Some warranties cover repairs by any licensed mechanic, and others include dealerships nationwide. Therefore, the owners have to take care of these things while traveling.

• Manufacturer Warranties: People, who have a habit of changing cars in a short period, should not go out of the manufacturer’s warranty period. For these people, the extended warranty is also of no use.

Facts regarding Auto Repair Insurance

• The seller of an extended warranty contract takes a commission that is included in the price of the warranty. It increases the cost to the bottom line.

• Although the insurance providers tell a fixed price, still it is negotiable, and the customer can bargain on it.

• If the buyer enrolls the Auto Repair Insurance into the car loan, it means they have to pay interest on the insurance portion also. It will increase the overall cost paid by the car owner.