1. Should I get an extended warranty with my car, and if so, what kind?

Legitimate manufacturer's warranties have both pluses and minuses. You do have to arrange for proper maintenance, but with an older car, some potential problems can be covered. Note that the cost and perhaps other items can be negotiated. However, do not buy a third-party warranty.

These warranties are frequently issued by shady third-party companies. While almost every type of business is regulated, strangely, there is usually no regulation of these companies, and if a state tries to regulate them, they relocate to another state.

2. How are extended warranty claims handled?

A. Manufacturer's Extended Warranties

You first have to distinguish who provided the warranty: a manufacturer or a third-party company. Manufacturers are usually legitimate, but they can periodically reject legitimate claims. One common issue is maintenance. The dealer's service department is frequently a source of revenue for the dealership, and they prefer that people service the car there. If you come to the dealer with a serious engine or transmission problem but no dealership repair records, they may initially give you a problem. However, if you have service receipts even from a third-party shop, they are required to provide warranty service.

B. Third-Party Warranty Companies

Many of these companies are shady and disreputable. You should first check on the complaint history of the company using a Google search or the Better Business Bureau. These companies may cover small repair requests. However, many of them look for ways to improperly deny claims. From our experience, claims are sent to a "B & E Department" (BS & Excuses), where the company tries to find ways to deny coverage. Typical examples include:

• Denying coverage on a covered item by saying an uncovered one was the cause.
• Delaying decisions.
• Pretending that a cohort hired to reject the claim conducted an evaluation and found no problem.
• Stating that a teardown of an engine was needed when the consumer cannot pay for one, and no teardown was originally listed.
• Providing promotional literature that speaks of broad coverage while placing exclusions and disclaimers in small print, violating Plain Language Laws.