Shogun

Like you I looked at CPO but I couldn't justify the price difference between CPO vs. private party plus a solid 3rd party warranty. I wrote the FAQ below a couple years back based on my **** tendencies when researching a couple of different warranty companies for my C5. Back then I posted this to the Corvette Forum. This time around I purchased from Viking Warranty due to price differences. All of that being said, the FAQ below should help you zone in on the important aspects of third party warranties.

Good luck,
Eric
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C5 Extended Warranty FAQ

First things first, these are my experiences/learnings – this FAQ does not guarantee, in anyway whatsoever, that everything I’ve written is true today or that you will have the same experience(s) that I have had. The Extended Warranties addressed in this FAQ are those that best mirror the C5’s original factory warranty.

For those with short attention spans – here’s your checklist (all of which is explained further in this FAQ):

* Buy before the factory warranty expires: To the best of my knowledge, with the exception of Viking Warranty, if you want to purchase an “exclusionary” extended warranty you must do so (to be safe) 1 month and 1,000 miles prior to expiration of the factory warranty. Viking is currently providing their Ultimate Coverage if the car is under 4 years old and under 50,000 miles.

* Prices: For a C5 with exclusionary 5 year/100,000 mile coverage and a $0-$50 deductible, you can probably expect to pay somewhere around $1,300 - $1,600. Watch the prices fall as the month comes to an end.

Is/Does your Extended Warranty and/or Company…

* Inclusionary or Exclusionary? You want an exclusionary warranty.

* Contract Period begin on the “in-service” date or date of purchase? You want date of purchase.

* Deductible (if there is one) applies to each visit or each problem? You want visit.

* Have a reinsurer? You want a reinsurer.

* Listed with the BBB? You want them listed with the Better Business Bureau.

* Allow you to take your C5 to any ASE accredited service center? You want to be able to take your C5 anywhere YOU choose.

* Pay for work at full retail rates? You want the “shop” to be paid full retail.

* Pay for claims with a corporate credit card? You want them to pay with a corporate credit card.

* Pay for rental car coverage? Yes, unless you really like bumming rides from spouse, friends, etc.

* Transferable when you sell the car? It may make a difference in the resale price.

* Provide Roadside Assistance, Towing, Trip Interruption, etc? It’s “icing on the cake”.

I am listing the three companies below (not as endorsements) but because I have had policies and experience with all three. Everything I’ve written in this FAQ – has previously been satisfied by these the three companies (with their SPECIFICALLY LISTED policies).


Warranty Gold (Diamond Policy): www.warrantygold.com
Warranty Direct (Diamond Policy): www.warrantydirect.com
Viking Warranty (Ultimate Coverage): www.vikingwarranty.com

Items Covered in this FAQ: Page #
The Checklist for those with short attention spans…………………………………………………. 1
What I’ve experienced at the Dealership…………………………………………………………… 2
Types of Extended Warranties: Inclusionary vs. Exclusionary…………………………………….. 2&3
Point in time to buy an Extended Warranty………………………………………………………… 3&4
What’s Important in a 3rd party Extended Company?……………………………………………… 4
Reinsurer…………………………………………………………………………………………….. 4
Better Business Bureau, etc…………………………………………………………………………. 4
Understanding the Length of Contract……………………………………………………………… 4
Zero Deductible or Low Deductible………………………………………………………………… 5
Taking Your Car Where You Want for Warranty Work……………………………………………. 5
Why to Make Sure Your Contract Pays at Full Retail………………………………………………. 5
Why a Corporate Credit Card is Important………………………………………………………….. 5
Rental Coverage……………………………………………………………………………………... 6
Is the Warranty Transferable?……………………………………………………………………….. 6
Roadside, Towing and Trip Interruption…………………………………………………………….. 6
Personal Experiences (what I’ve had covered)……………………………………………………… 6&7

What I’ve experienced at the Dealership:
My knowledge of the extended GM factory warranty (or a dealership’s “house” warranty) versus one of the 3rd party warranties listed above has been insightful. It all boils down to four main points: Price, Length of Contract, Coverage and Convenience – all of which are explained further in this document.

I have experienced the “high-pressure” sales techniques at dealerships regarding either the Factory Extended Warranty or their “House” warranty. In both cases, the dealership explained that they would not service my car under another 3rd party warranty. I had to buy “their” policy (this ended up not being true as you will read later in this FAQ).

We all understand profit margins, distribution patterns, markup, and how every business needs to make money. I will leave my current diatribe with this thought: Compare all policies to one another on the merits of Price, Length of Contract, Coverage and Convenience – and make sure you do it “apples to apples”. Apples to Apples – I can’t underscore that point enough. You may see deceptive marketing practices. It is my hope that this FAQ helps to clear the way for a solid, understandable, comparison once you compile all the facts; i.e. the fine print. Here we go…

Types of Extended Warranties: There are two types of extended warranties: exclusionary and inclusionary. (You want “exclusionary” coverage. I know that “exclusionary” sounds contradictive to what you want but here’s the explanation:

Exclusionary Policies: As stated, will cover everything NOT listed in the exclusion part of the contract. This generally means as close to “bumper to bumper” coverage as you can get (or as close to the original factory warranty as possible). See sample language below:

Inclusionary Policies: Are the typical “power train” or the “cover everything that’s listed” type of contract. This is very to simple to understand because the contract only lists WHAT IS COVERED. Do yourself a favor and try to figure out all the items NOT COVERED. That’s the powerful difference between exclusionary and inclusionary language. Despite what they promise, if the part IS NOT listed, IT IS NOT covered by the terms of the contract.

With the three companies mentioned earlier, all of their top tier warranties are/were “exclusionary” contracts.
A sampling of the “exclusions” part of a contract is listed below:

EXCLUSIONS
This Vehicle Service Contract Provides No Coverage or Benefits:
1. FOR ANY OF THE FOLLOWING PARTS: CARBURETOR, BATTERY, STANDARD TRANSMISSION CLUTCH ASSEMBLY, FRICTION CLUTCH DISC AND PRESSURE PLATE, DISTRIBUTOR CAP AND ROTOR, SAFETY RESTRAINT SYSTEMS (INCLUDING AIR BAGS), GLASS, LENSES, SEALED BEAMS, LIGHT BULBS, FUSES, CIRCUIT BREAKERS, CELLULAR PHONES, TELEVISION/VCR, GAME CENTERS ELECTRONIC TRANSMITTING/RECEIVING DEVICES, GLOBAL POSITIONING SYSTEMS, VOICE RECOGNITION SYSTEMS, BRAKE ROTORS AND DRUMS, ALL EXHAUST COMPONENTS, AND THE FOLLOWING EMISSION COMPONENTS: EGR PURGE VALVE/SOLENOIDS, VACUUM CANISTER, VAPOR RETURN CANISTER, VAPOR RETURN LINES/VALVES, AIR PUMP/LINES/VALVES, CATALYTIC CONVERTER/FILTERING/SENSORS, EMISSION VAPOR SENSORS, WEATHER STRIPS, TRIM, MOLDINGS, BRIGHT METAL CHROME, UPHOLSTERY AND CARPET, PAINT, OUTSIDE ORNAMENTATION, BUMPERS, BODY SHEET METAL AND PANELS, FRAME AND STRUCTURAL BODY PARTS, VINYL AND CONVERTIBLE TOPS, ANY CONVERTIBLE TOP ASSEMBLIES, HARDWARE OR LINKAGES, TIRES, WHEEL/RIMS. EXTERNAL NUTS, BOLTS AND FASTENERS ARE NOT COVERED UNLESS SPECIFICALLY LISTED IN THE SCHEDULE OF COVERAGES (EXCEPT WHERE REQUIRED IN CONJUNCTION WITH A COVERED REPAIR).

2. FOR MAINTENANCE SERVICES AND PARTS DESCRIBED IN YOUR VEHICLE’S OWNER’S MANUAL AS SUPPLIED BY THE MANUFACTURER AND OTHER NORMAL MAINTENANCE SERVICES AND PARTS WHICH INCLUDE, BUT ARE NOT LIMITED TO: ALIGNMENTS, ADJUSTMENTS, WHEEL BALANCING, TUNE-UPS, SPARK PLUGS, SPARK PLUG WIRES, GLOW PLUGS, HOSES (EXCEPT STEERING AND AIR CONDITIONING), DRIVE BELTS, BRAKE PADS, BRAKE LININGS/SHOES, AND WIPER BLADES. FILTERS, LUBRICANTS, COOLANTS, FLUIDS AND REFRIGERANTS WILL BE COVERED ONLY IF REPLACEMENT IS REQUIRED IN CONNECTION WITH A BREAKDOWN.

The above is “the meat” of the exclusions in an exclusionary contract. There is more, and you will need to READ the FULL contract before purchasing, but usually the remaining information deals with exclusions due to abuse, neglect, failure of proper maintenance, Y2K, etc.

Now as you read through the above, think of all the things NOT LISTED – items like blown speakers, power seats, switches, electronics, wheel bearings, etc. This is why you want an exclusionary type policy.

At what point in time do you want to buy an Extended Warranty?
This covers two topics: 1. What’s the latest point in time you can buy an “exclusionary” warranty and 2. When’s the best time to buy an extended warranty.

1. The last point you can buy and exclusionary warranty: As mentioned earlier, to purchase an exclusionary warranty (the only current exception I know being Viking Warranty), your car must still be within “factory warranty”. Once that expires – you’re stuck with inclusionary coverage which typically does not provide as much coverage or value (price/benefit). To be safe, purchase the exclusionary warranty 1 month and 1,000 miles before the factory warranty expires.

As mentioned, Viking Warranty seems to be the “outlaw of the bunch”. They continue to provide their exclusionary coverage even after the factory warranty has expired but not after the four year or 50,000 mile mark. Get it while you can…

2. When’s the best time to buy an extended warranty? This was an eye opener. Just like with car buying, most of these companies aggressively sweeten their deals (rather significantly) at month’s end. I’ve experienced “last minute” price decreases in the hundreds of dollars. Watch their websites daily for “specials” and if you make it to the manager/supervisor then you’re probably close to striking your best deal. Remember, if you don’t like to price haggle then just watch the website and then sign and drive.

Tip: As you will read later in this FAQ, the contract length and how it is calculated is important. The most desirable contract length begins on the DAY of CONTRACT PURCHASE (not the in-service date). Therefore, the closer you buy your exclusionary policy to the end of the factory warranty translates directly into longer coverage. Read more on this topic under the “Length of Contract” heading below.

What’s important in a 3rd Party Extended Warranty and Why:

Reinsurer: Simply put, if the company you bought your warranty from goes out of business, you don’t want to be left holding a worthless piece of paper. Make sure your warranty company has an insurance company “reinsuring” the policy you’ve purchased; i.e. if the company goes out of business that there is an additional insurance company that will cover all future claims against your policy. Some of the warranty companies (even those listed above) are simply administrators or sales agents for a specific insurance company that is underwriting your policy. Make sure the insurance company is reinsured – not the administrator (they aren’t insuring a thing – just selling.)

Better Business Bureau (and other accredited associations): This is straightforward – you’re buying, for lack of a better term, a piece of paper. Yes, that’s right you fork over $1,500 and you get, well, a piece of paper known as a contract. Who says that company/contract will be there when you need them? The best guide is history and experience. The warranty company you use should be filed with the BBB or some like known organization. If they’re not, you need to wonder “why?” If you’re extra retentive, call the BBB to check their record.

Understanding the Length of Contract: It is extremely important that you fully understand how your contract is structured. How the contract period (length of the warranty) is construed and worded vs. marketed can be area of deception for less than honorable companies – ALWAYS READ AND UNDERSTAND THE FINE PRINT.

Example: Let’s say we’re thinking about purchasing a 5 year/100,000 mile warranty on a 1999 C5 with 30,000 miles on the odometer and today’s date 7/31/02. Seems pretty straight forward, huh? Here’s an example of how two contracts can differ:

Contract One: Yes, it is MARKETED as a 5 year/100,000 mile warranty BUT the five years began on the “in-service” date of the car (meaning when it was first sold). So your C5 will only be covered until the year 2004 or 100,000 miles whichever comes first.

Contract Two: Is a TRUE 5 year/100,000 mile warranty because your warranty contract begins ON THE DAY OF PURCHASE (7/31/02). In this case, your precious C5 is covered until the year 2007 – a full three extra years of protection. Hey, maybe you will hit that 100,000 limit after all!

Note: Of all the warranties I’ve researched – the warranty has always expired based on the earliest occurrence of the contract length or mileage limitation; i.e. 5 years/100,000 miles whichever occurs FIRST. I have never seen one worded, “whichever occurs LAST”. If you find one worded the latter – please let all the C5er’s know!

Zero Deductible or a Low Deductible: Deductibles are a mechanism to discourage claims and/or soften the amount the insurance company must pay for each repair. When buying a policy look for the “no-deductible” option or a lower deductible than what is initially listed. Also, make sure when you’re comparing policies that the deductibles are an apples to apples comparison.

Tip 1: here’s a way to analyze the “deductible” vs. the price of the policy. The exact same policy will be priced differently based on the deductible required; i.e. the higher the deductible the lower the initial policy price – with the inverse being true as well. Ask yourself this question – How many times do you think you will take your car in for warranty work? Take that number and multiply it by the deductible and then compare your dollar amount to the difference in price between the policy with a zero deductible vs. the policy with a $100 deductible. That thought process should give you some guidance on which deductible, if any, you should choose.

Tip 2: Make sure your deductible applies to the visit vs. specific problems. Here’s why: You take your car in for warranty work and you have 8 items you want fixed (all covered under warranty). Do you really want to pay your deductible for each item fixed or do you just want to pay the deductible for the visit? Easy answer.

Make sure the Warranty allows you to take your car to any accredited ASE garage: This is a biggie – many “house” warranties require service at their location or they may charge you a higher deductible if you go elsewhere (if they cover it at all – read the fine print). That’s a bummer if you move. In simple English, you want to take your car to garage of choice. This is especially true when you want to take it to the dealer for “factory spec” work.

Make sure the Warranty pays the Service Center’s Retail Shop Rates: Remember above when I mentioned that my dealer wouldn’t work on my car if I bought a warranty from a 3rd party warranty company? Well, that same dealer’s service center didn’t agree when they realized my warranty paid full retail rates. Another side bonus to this equation is that the service center will usually “go out of their way” to make sure “they’ve found everything” that was wrong with my car.

Make sure the Warranty pays the Service Center via Corporate Credit Card: Here’s why: Some warranties require you to pay the service center first which means you must file the paper work with the warranty company and wait for reimbursement. If the warranty company pays by corporate credit card, then most service centers will accept payment directly allowing you to leave with your repaired C5 without a care in the world.

Note: I have been to two dealerships that would not accept the warranty company’s Corporate Credit Card. In both cases, that was their “reason” of why I should have bought their lesser policy at a higher price. This forced me to mail the paperwork myself and wait for reimbursement. FWIW, the price/coverage difference between their policy and the one I purchased made this a “no problem” equation for me. I was reimbursed within three weeks.

Tip: If the service center refuses to take the Corporate Credit Card, mention that the “other” service center will - and that you will be taking all your FULL RETAIL PAYING future warranty work to that other service center. That strategy worked for me once.

Make sure your Extended Warranty covers Rentals: This is self-explanatory. Nothing is worse than getting shuttled by your family/friends/workmates. Make sure your policy covers a rental car for the period that your car is under repair (has to be at least an overnight visit). They usually only provide $30/day but it’s enough for a Toyota Corolla and it’s well worth it for your sense of independence.

Make sure your warranty is Transferable: If you sell your car, the remainder of your warranty should be transferable to the next owner for a relatively low fee (usually $50). This makes for an outstanding “sales point” if your selling your car and it is outside of the manufacturer’s warranty. Think about it, you’re looking to buy a C5. One is listed at $27,500 with 37,000 miles (out of factory warranty). Yours is listed at $28,500 with 45,000 but it is fully covered until 100,000 miles or the year 2007. Assuming the cars are in identical shape – which would you choose?

Roadside assistance, Towing, Trip Interruption, etc: Most of the exclusionary policies have this provision. I’ve never used it, didn’t research it much and I carry AAA anyway – but it is nice to know that I have it if needed.

Personal Experiences:
I’ve included the information below not to “sell you” on extended warranties but to give you a sense of some of the items I’ve had covered and repaired. Remember, YMMV (your mileage may vary).

I’ve had four different contracts between the three companies listed above. All were the full “exclusionary” policies. With the exception of my GS400, all the policies paid for themselves through warranty claims. I would like to think I sold my GS400 at a higher price and/or more quickly because I actually had extended warranty coverage when all the other competing GS400’s in the classifieds did not (at least that’s how I rationalized it in my mind!).

With all three companies I never had a claim denied. Here’s the list of work performed:

1995 STS (All work performed at a Cadillac Dealership):
A/C Compressor
Power Seat (seat moved back & forth on its track)
Power Window Regulator
2 Engine Mounts
1 Loud Speaker
2 Wheel Bearings (work performed at NTB when I bought tires)
A/C Blower Motor

1998 Discovery (All work performed at Land Rover):
Cruise Control Computer
Power Seat (seat moved back & forth on its track)
Top Engine Teardown (R&R for decarbonization)
That’s it so far – I know more will come!

1998 GS 400 (Work performed at Lexus):
Door Switch Replaced (overhead light inoperative when door was opened)
(This warranty was a losing proposition from a claims standpoint)

1998 C5 (All work performed at Chevrolet):
2 Power Window Motors
Brake Booster
Lock Touch pad (back lighting was brighter than the rest of the switches in the car)
A/C Blower Motor
Power Seat (seat moved back & forth on its track)

I hope this FAQ helps to shed some light on extended warranties and, at a minimum, gives you the knowledge to compare different policies on an “apples to apples” basis.

Good Luck,
Eric Bernstein
1998 C5

Shogun

Gents,
I apologize for posting this as a new thread - I meant to post it under the recent CPO thread.
Thanks,
Eric

D2-AUTOSPORT

Thank you very much for that write up! although long, it provided great detail. One of the MODs should sticky it!

Question, when you took your Lexus in , what was the experience like? I'll tell you mine
1. Dropped car off the night before,
2. Went next morning to explain problem and drop off keys
3. left in 03 Lexus loaner
4. received call that all work would be covered.
5. rejoiced to the HIGH HEAVENS (large $$$ job)

If I could emulate this experience with a aftermarket warranty, then i will definetely consider it!!

Shogun

Set an appointment time.

Took the car in at scheduled time

Gave them all Warranty info. phone #s, etc. - told them they needed an authorization # prior to fixing

Recieved loaner car (remember, the warranty pays out at retail rates - I want my loaner)

They diagnosed, called the warranty company for authorization, receieved authorization and fixed part.

I picked up, paid the bill (Dealership wouldn't accept the warranty comapny's credit card) and left.

Mailed my receipt to warranty company

Received reimbursement within 2 weeks.

That's how it worked for me.
Eric

D2-AUTOSPORT

That is beautfiul man, I think Lexus has alot to do with the Level of service also. They generally have good practices, and a little bit of business sense on the owners part does not hurt.

I guess you could have found out if they would accept the payment upfront, and had no out of pocket expense!!

Thanks for your help, it is exactly what i was looking to find out!