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Auto Warranty Tips for Car Owners

In the history of contemporary automotive, the current scenario is the most turbulent one. Several dealerships have been closed after General Motors and Chrysler have gone bankrupt. All this is causing a lot of confusion and worry for the consumers. A few questions that are important have been answered below.

If the car brand is declared bankrupt

When a brand is in a mess financially, another brand takes over it. As a result, the consumer suffers less. On going totally bankrupt, a service on warranty is generally provided by its sister concerns, provided the extended warranty was given by the manufacturer.

In cases where the parent company shuts operation

All those automaker companies that are declared bankrupt, continue manufacturing automobiles, but decrease their workforce. The Federal Government, on 30th March, 2009, assured to support the warranties of local vehicles manufactured by Chrysler and GM. The buyers automatically qualify for this warranty.

Resale value of a car falls, if a brand closes, or declared bankrupt by the parent company. A better idea would be to drive it till its extended warranty period.

In cases where the local dealer shuts operation

881 auto dealerships shut operations in 2008 and the consumers got affected in many ways.

  • Having to travel beyond your city limits to get the service of warranty is one of the disadvantages. If the work needs more time than a few hours, then it can be a pain.
  • Though the short-term benefit in case of shutting down of dealerships may be beneficial to consumers in terms of vehicles being sold off at throw away prices, in long-term disadvantage can be more comparatively, as lesser dealerships implies high prices for a new car because of less competition.
  • It also means reduced options in terms of number of brands available in the market when a consumer wants to buy a new car.
  • Getting service on warranty or any other post-purchase service may get very difficult, if the car has been bought from a single dealer which has shut down its operations locally.
  • The sales unit of new cars may be shut down by many dealers, but the one for used cars may continue to operate as that yields higher profits.

In situations where the extended –warranty dealers shut operations, it can cause real inconvenience. Extended warranty can be of three types -:

Manufacturer backed – These are applicable all over the nation. The warranty is honored either by the federal government, or the parent company.

Dealership-backed – This is applicable only with the dealership from whom the car has been purchased. You can have real trouble, if the dealership shuts down.

Independent – These are third parties who provide warranty but in several cases, they shut down abruptly.

Many dealerships provide their own warranty as they earn more profit from this than the warranty provided by the manufacturer. In case where a dealer has sold a third party warranty to you and the third party has shut down, you can request the dealership which is still in operation to assist you with the service. The dealer may also provide you with a considerable discount, when it provided you the replaced warranty.

All this doesn’t mean you need to sell off your vehicle and invest in something new. Keeping your vehicle is a much smarter decision, as the resale value of cars has dropped in the current market. Even if you are planning to buy a new car, you needn’t worry much as the warranty extended by the car manufacturers will hold to be valid in one way or the other. Moreover, you can avail a new car at a real cheap price, when these dealerships plan to shut operations.

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