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Insurance Cover and Warranties (Before deciding to buy a service contract,…
Insurance Cover and Warranties
Types of insurance coverage
Liability (40-50% of premium)
Bodily-injury coverage
Property-damage coverage (e.g. to another person's car)
Collision (up to 30% of premium)
Pays for the physical damage to your car as a result of an accident
Limited by deductible
Medical
Covers medical payment for driver and passengers injured in accident
Rental reimbursement
Pays a specific
Towing and labor
Comprehensive (about 12% of premium)
Pays for damage caused by vandalism, hailstorms, floods, theft etc.
How insurance rates are set
Geographic location (often classified by postal code)
Rural locations usually have lover rates; urban locations usually 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
Personal charactericstics
Gender
Marital status
Age
Personal habits
Type of frequency of vehicles use
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 merchantability-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 seller says in writing that there is no warranty
Dealer warranties
Terms and conditions can vary greatly
Useful to compare warranty terms on similar cars or negotiate warranty coverage
Offered and specifically written by the dealer
Unexpired manufactured'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
Whether there is a deductible and, if so , how much?
Whether repairs and service can be performed at locations other than at the dealership
Whether the vehicle is likely to need repairs and, if so , the potential cost of repairs
Whether the contract covers incidental expenses such as towing
Whether the warranty already covers the same repairs
Whether there is a cancellation or refund policy and, if so, the cost
Which repairs the contract covers
Whether the dealer or company offering the service is reputable
The cost
Whether you can purchase the service contract later