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All About Insurance and Warranties (Before Deciding to Buy a Service…
All About Insurance and Warranties
Types of Insurance Coverage
Collision
Pays for physical damage to your car as a result of an accident.
Comprehensive
Limited by deductible.
Pays for damage caused by vandalism, hailstorms, floods, theft, etc.
Liability
Property-damage coverage (e.g. to another person's car.)
Bodily-injury coverage.
Medical
Covers medical payments for driver and passengers injured in accident.
Rental Reimbursement
Pays a specific amount per day to rent a car while yours is being fixed.
Towing and labour.
How Insurance Rates are Set
Personal Characteristics
Age, gender, marital status, personal habits (e.g. smoking), type and frequency of vehicle use (e.g. commuting)
Geographic Location
Rural locations usually have lower rates; urban locations have higher rates.
Driving Record
Accident with death, bodily injury, or property damage may trigger a surcharge on premium for three years.
Number and kind of moving violations (and total of associated points).
Number of years insured with the company.
Vehicle Characteristics
Damage, repair, and theft record of type and model of car.
Age of car.
Warranties
As-is (no warranty)
No expressed or implied warranty.
If you buy a car and have problems with it, you must pay for any repairs yourself.
Some provinces do not permit "as-is" sales on used cars.
Implied Warranties
Warranty of mercantability - a product will do what it is designed to do.
Warranty of fitness for a particular purpose - a product will do what the seller promises it will do.
Always in effect unless the product is sold as-is or the seller says in writing that there is no warranty.
Dealer Warranties
Offered and specifically written by the dealer.
Terms and conditions can vary greatly.
Useful to compare warranty terms on similar cars or negotiate warranty coverage.
Unexpired Manufacturer's Warranties
Manufacturer's warranty can sometimes be transferred to the new owner. There may be a fee for the transfer process.
Before Deciding to Buy a Service Contract, Find Out..
.
The cost.
Which repairs the contract covers.
Whether the warranty already covers the same repairs.
Whether the vehicle is likely to need repairs and, is so, the potential coast or repairs.
Whether there is a deductible and, is so, how much?
Whether repairs and service can be performed at locations other than at the dealership.
Whether the contract covers incidental expenses such as towing.
Whether the dealer or company offering the service is reputable.
Whether you can purchase the service contract later.
Whether there is a cancellation or refund policy and, if so, the cost.
Whether the contract covers incidental expenses such as towing.