GM Extended Warranties - 7 Key Factors That Impact Your Price |
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| Topics: General Motors
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Justin Reynold
21 May 2009
A GM extended warranties price can be dramatically impacted by seven key factors. One of these factors can be a difference of over $900 in the span of 5 minutes or less.
Some of these 7 key factors are obvious, while some may not be so obvious. Let's start with some of the more obvious factors and work our way into those that may lead to consumers feeling as if they were ripped off and in some cases, consumers becoming the victim of an extended warranty scam.
7) The Age of Your GM Vehicle
An older vehicle equals higher risk and therefore, a higher price. This applies to older vehicles with lower miles as well. Older, low mile vehicles still run into problems: seals and gaskets dry up, fuel pumps, computer modules and tie rods go bad, etc.
6) The Miles on Your GM Vehicle
Each additional mile added to the odometer means the vehicle is one more mile closer to a break down. This equates to higher risk and therefore a higher price.
5) The Model of Your GM Vehicle
A Chevy 3500, 4x4, dual rear wheel, diesel truck will have a higher price than a base model Chevy Aveo.
There are simply more things to go wrong with the truck and from experience, the "number crunchers" know that the truck will be used for towing, hauling heavy loads, possibly off-roading and other activities that may shorten the life span of the trucks parts.
4) The Length of Your Coverage
The more coverage (time and miles) you opt for the higher the price.
The less obvious price factors:
3) When You Buy Your GM Extended Warranty
The cost of coverage increases as your vehicle inches closer to the GM factory warranty expiring. Once it has completely expired, you'll certainly see a spike in pricing.
This is due to GMPP, General Motors extended warranty division, assuming all the financial risk of your vehicle breaking down from day one.
Every day that goes by and every mile added to the vehicle has the potential to increase the cost. In addition, GM can raise their extended warranty costs at any time.
In fact, most extended warranty companies will have cost hikes at least once a year and oftentimes twice a year. The earlier the better is the key to the lowest price.
2) Type of GM Extended Warranty Coverage You Buy
Here's where the extended warranty scam can come into play. If you happen to run into one of the unscrupulous Finance Managers out there, they may try to sell you a Basic Guard (the most basic of the GM extended warranties) and represent it as a Major Guard (the "Cadillac" of GM extended warranties).
Be sure to read your warranty contract closely and, if your vehicle qualifies, always opt for the GM Major Guard Coverage. This virtually eliminates any doubt as to what is covered and what is not covered.
1) The $900 Dealer Difference
It can take you less than 5 minutes to either overpay $900 or less than 5 minutes to save $900, the choice is yours.
Not all GM dealers sell their extended warranties for the MSRP set by GMPP. Some dealers will sell for a little less, some for full MSRP and some for more than MSRP.
If you are considering buying your GM extended warranty from the dealer that you bought your vehicle from, because you got a great deal, be careful not to be lulled into thinking that the Finance Manager, of this same dealership, will have the same "low price leader" mentality.
A lot of dealerships have $700, $900, $1,500 and yes, I seen even higher mark ups on GM extended warranties. The time it would take you to get just one more quote (let's say 5 minutes) could be the $900 difference.