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Rings of Ire

Source: Newsweek
Date: July 6, 2007
Summary: Sometimes, it just doesn't pay to be first. Microsoft's Xbox 360 videogame console beat its competition...

Looking for high quality at a reasonable price for extended auto warranty plans? I've compiled a list of many of the companies out on the web for either new or used cars, and tried to include useful highlights and links to make the search a little easier. Please remember that while I try to insure the information is accurate and up to date, occasionally a piece of information on this site will become outdated. If you encounter an error, please email me and I'll try to correct it a.s.a.p.

"Extended warranties and car insurance can all be purchased online. Spend some time examining exactly what coverage is available. There is a wide range among different plans. Finally, watch the amount of the deductible." - quote from Better Business Bureau web site.

disclaimer

Explanation of Terms

Insurer: Most reputable auto warranty companies contract with another company to insure their obligations for a service contract. For example, if a warranty company ran into financial difficulties and failed to meet their obligations under the service contract, the insurer could step in to pay the claims. As the exact arrangement between the warranty company, the insurer, and any re-insurers varies from company to company, always read your contract carefully.
Re-insurer: Reinsurance is an arrangement between two or more insurance companies to spread out the risk of an insurance contract. This is done so that an unusually large loss from a policy does not fall on a single company. Once again, the exact arrangement between the warranty company, the insurer, and any re-insurers varies from company to company, so always read your contract carefully.
Ratings: When possible, I've tried to include the A.M. Best's rating for insurers and re-insurers. A.M. Best's ratings are widely recognized as the benchmark for determining an institution's financial strength.
BBB: For years, the Better Business Bureau (BBB) has provided an excellent way to gauge a company’s overall success and satisfaction. It is comprised of 145 independent local Better Business Bureau chapters, which are affiliated with the national umbrella organization, the Council of Better Business Bureaus (CBBB). Do keep in mind that there is little to no reporting consistency across the independent chapters, so it may be difficult to compare companies using only this information.

The National BBB runs a program worthy of some consideration. In order to participate in the BBB Online Reliability Program, a company must have a satisfactory complaint handling record, agree to participate in the BBB's advertising self-regulation program, agree to abide by the BBB Code of Online Business Practices, and agree to dispute resolution with the BBB. Most of the companies who participate in this program value their standing in the BBB, and tend to do a better job at handling complaints.
Sample Contract: If the auto warranty company has a copy of their contract online, I've tried to include a link to it. When you make a purchase, still read your contract carefully and look for any differences.
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Warranty Direct

logo: Warranty Direct
Website: www.warrantydirect.com
Vehicle Types: Cars, Trucks & SUVs
Coverage Area: United States, Canada, United Kingdom and New Zealand
In Business Since: October 1980, On the Internet since January 1994
Administrator: Interstate National Dealer Services
Insurer: National Service Contract Ins Co RRG (not rated)
Re-insurer: Hannover Reinsurance (Ireland) Limited (Rated: A)
BBB: Yes (view report)
Mileage: Vehicles with up to 75,000 odometer miles are eligible for a variety of coverages which all include wear-and-tear failures.
Vehicles with up to 150,000 miles are eligible for comprehensive, major component coverage.

Warranty Direct is the consumer division of Interstate National Dealer Services, one of the oldest and largest independent auto providers in the US. In addition to offering their auto direct to consumers, over 2,200 manufacturer’s, dealers, banks and credit unions choose to sell their coverage. They have been named to the Forbes Magazine list of the "Top 200 Small Companies in America" 3 times. They sell a wide variety of contracts and their greatest strengths are the breadth of their coverages, the quality of their insurer and their tenure in the industry. Warranty Direct is a member of the Better Business Bureau and WebAssured.com, and participates in the BBB OnLine Reliability program.

Warranty Direct has been selected the exclusive auto warranty partner for many major automotive sites including Edmunds.com and E-Loans.com.

In addition to their sales in the United States, their parrent company sells auto warranty contracts in the United Kingdom and New Zealand.

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AA Auto Warranty

logo: AA Auto Warranty
Website: www.AAAutoWarranty.com
Vehicle Types: Every major make, model, and year (including comercial vehicles)
Coverage Area: United States (excludes CA) and Canada
In Business Since: 1989 / Online since 2001
Administrator: Numerous - Based on Policy
Insurer: Numerous - Based on Policy
Re-insurer: Numerous - Based on Policy
BBB: Yes (view report)
Sample Contract: view contracts
Mileage: Any mileage and any year

AAAutoWarranty’s online quote system is unique. The warranty quote engine analyzes a vehicle’s and owner’s characteristics and weighs this against a large selection of warranty policies based on price, coverage, term, and options to determine the best valued policies for one's particular needs. This form of comparative shopping is capable of giving online quotes from multiple warranty provides at the same time.

Overall, this is one well worth checking out.

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Paragon Motor Club

logo: Paragon Motor Club
Website: www.paragonmotorclub.com
Vehicle Types: Cars, trucks, SUVs
Coverage Area: United States
In Business Since: April 2002
BBB: Yes (view report)
Insurer: Mercury Insurance
GMAC Insurance Group (A-)
Sample Contract: view contract - Wrap Coverage (pdf)
view contract - Mercury (pdf)
view contract - Motor Insurance (pdf)
Mileage: Vehicles with up to 100,000 odometer miles can obtain coverage.

Paragon Motor Club is a member based company which is very different than most "warranty companies". Membership is not required to purchase their products but you automatically become a member with any purchase and member prices are available to the public.

Paragon specializes in offering only auto extended warranty and roadside assistance services that meet their quality assurance verification process in financial stability while delivering a high level of service. They compare plans between top rated insurance companies to get you a good price on up to 10 years of coverage to meet your needs. Wrap coverage is also available which "wraps" around the manufacturer warranty to give complete coverage at a lower price.

Paragon Motor Club is one of the few companies offering plans that are fully licensed in states where available and 100% directly insured by the Mercury Insurance Group (publicly traded NYSE-MCY) or Motors Insurance, a subsidiary of GMAC. Paragon Motor Club is a member of the Better Business Bureau and one of our recommended companies.

Mercury Insurance - Mercury is a publicly traded company (NYSE-MCY) and offers Mechanical Breakdown Coverage (MBI) or commonly referred to as extended warranty coverage through their subsidiary company, American Mercury Insurance. Since 1975, American Mercury has been selling MBI coverage to customers. Coverage is available for new and used vehicles which qualify, and repairs can be done at any licensed facility in the United States. There is no limit to the number of claims that can be filed under the policy and all claims are handled by AMI staff, not by third-party administrators.

Motors Insurance - Universal Warranty became part of the Motors Insurance Group, a subsidiary of GMAC, and its vehicle service contracts are now exclusively insured by MIC General Insurance Corporation and Motors Insurance Corporation (collectively "MIC").

As a pioneer in vehicle service contract business, MIC has been involved in insuring vehicle service contract programs since 1972 and continues to demonstrate solid operating performance and strong capitalization.

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