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Auto Warranty and Loan Solutions
Let’s
face it, whenever you decide to purchase a new or pre-owned vehicle
the last thing on your mind are repair costs. Your primary concern is
“how much is my new or pre-owned car, truck or van going to cost me
each month?” It’s a new vehicle, so why would I have repair
costs? So, as an auto buyer you decide not to get warranty protection
on your car, truck, van or SUV to stay within your monthly budget.
Well, consider
this fact. The standard warranty on most new and pre-owned vehicles
is 3 years or 36,000 miles (whichever comes first) and the average
auto loan term is 66 months.
Those unexpected
out of pocket repairs can cause undue stress to your checkbook and
budget. By adding warranty protection to your monthly auto payment
you can protect yourself from
making monthly
payments on a non-functioning or improperly functioning vehicle
because you cannot afford to make repairs.
Getting less
than fair market value for your trade-in because your vehicle is
non-functioning or improperly functioning.
Getting behind
on your monthly auto payments because of unexpected repair costs.
Carrying over
negative trade equity (being-upside down) to your next vehicle loan.
If your vehicle
is worth less than the loan amount, you will have to add this amount
to your next vehicle loan. What does this mean to you? Well consider
this example.
Tim purchases a
new Cavalier© in January of 2002 and decides against purchasing
the warranty protection. In June 2005 Tim’s engine failed and the
repair estimate came to $3,350.00 because he had over 41,000 miles on
the Cavalier© and he was over the 3 year 36,000 mile standard
warranty. Tim didn’t have the money so; he decided to trade it in
as-is at the dealership where he originally purchased it for a brand
new Chevy Cobalt©.
Kelly Blue Book
shows that Tim’s Cavalier© is worth $5,425.00 in “Good”
condition. However, because of the blown engine, Tim’s trade-in is
worth only $2,075.00 because of the necessary engine repairs. Tim’s
payoff amount for his existing loan on the Cavalier is $5,625.00.
The difference
between what Tim’s Cavalier© is worth and how much he owes on
his existing loan is $3,550.00. Tim will now have to add this amount
to the loan for his new Cobalt©. This is what is referred to as
“being upside down” or having “negative trade equity”. Having
warranty protection on the original loan could have saved Tim over
$3,000 and prevented him from paying additional repair costs and
adding additional cost to his new Chevy Cobalt© loan. Tim could
be paying for this mistake for years to come because more time is
needed to pay the negative equity that was added to his new Cobalt©
loan.
Warranty
protection plans can be added to your monthly note for less than
$30.00 a month.
http://www.bestautosolutions.com