How many business-only vehicles do you own and operate? If you have enough for a fleet, then you need a more comprehensive car warranty, like an extended warranty plan. An extended warranty covering all your small or large business needs is one way to protect your business investment.
You probably got a new car warranty when you purchased your vehicle. Those typically cover damage to the vital components within a certain amount of time and/or under a certain number of miles.
Commercial warranties are different from your personal car’s warranty in that it covers more for longer. Your business vehicle gets a lot of use, so you want protection from all types of accidents and car trouble. Extended coverage for your commercial warranty can cover your back end if you have an accident or a breakdown on the job.
How do you know if you need an extended warranty or vehicle service contract? Keep reading for several tips on how to keep your fleet performing at its best so your business can run as smoothly as possible.
Do you need an extended warranty?
First things first: how many vehicles are in your fleet? Technically, one or more vehicles are considered a fleet, so if your business runs out of one van, you still qualify for extra coverage under your business.
Is your fleet made up of newer vehicles? Extended coverage can come in handy when you have a fleet of newer vehicles with up-to-the-minute technology. Do you understand the technology in your cars? In other words, when it comes time to fix or update one of its high-tech systems, can you do the honors? If you need professional assistance with these matters, you should consider extended coverage.
If your fleet is older than ten years, how reliable are your vehicles? What’s your average monthly maintenance bill for each van, truck, or car you run? How much protection are you considering? These are the questions you must ask for an older fleet. Older vehicles have more wear and tear and are more likely than newer vehicles to need repairs or replacements. If you are spending out of pocket every month or two for one or more vehicles in your fleet, you should consider extending your warranty coverage.
Simple math can tell you whether a commercial warranty is right for your business’ fleet. You’ll have to weigh the pros and cons of each plan before you decide if an extended warranty is the best fit for you. So, what should you know going in? Read on for tips on how to tell if a car warranty is right for you.
What’s covered by an extended warranty?
Most extended warranty plans offer comprehensive coverage for all your fleet needs. Comprehensive coverage is good for up to 10 years in most cases. A lot can go wrong in a decade; are your vehicles protected? Basic warranty plans are also available for a shorter period or fewer but more vital repairs (like the transmission or engine).
A basic commercial warranty is going to cover the following:
- Engine
- Transmission
- Cooling system
- Drive axle
- Transfer unit
More extensive coverage can be purchased for systems like suspension, brakes, steering, and more, depending on your plan and individual needs. The more systems you get covered, the more expensive your premium is. However, most companies offer a variety of plans to fit your fleet’s needs and your business’ budget.
- Bumper-to-bumper warranties, just as the name implies, cover everything on the vehicle from the front to the rear bumper.
- Powertrain warranties cover the basics that make your car run: transmission, engine, and drive systems.
- Wear-and-tear warranties cover normal wear and tear. Only the best extended warranties cover normal wear and tear on a business vehicle.
- Maintenance plans cover routine maintenance and common parts and labor. Sometimes, these plans include your fleet’s tires. You can also purchase a warranty for your tires separately.
- Emission warranties, Factory Accessory Plans, and Rust or Corrosion warranties are also available for fleets.
After you’ve chosen the kind of coverage you need, it’s time to look at the price and availability for your area before choosing a plan.
What does it cost?
The more maintenance covered under an extended warranty, the higher you can expect your premium to be. Most companies will offer a variety of options to suit your budget and expectations, not to mention your business’s needs.
Vehicle age and maintenance are going to be the biggest factors here, along with the type of coverage you choose.
What’s the downside?
Much like insurance, your extended warranty is a worst-case-scenario plan for damage and depreciation to your work vehicle. You may never use it. Depending on the type of coverage you choose and the length of time the warranty covers, you could be pouring thousands of dollars into a warranty you’ll rarely (if ever) use.
Is it worth the money?
Most new-car warranties last up to five years or a certain number of miles. Depending on your business and fleet, you could be out of your new car warranty in no time. Evaluate how much you drive your vehicles and what kind of mileage you accrue. Will you be out of your new-car warranty in 6 months or 2 years?
If you purchase an extended warranty, you’ll be covered for certain repairs and maintenance for up to an additional ten years and/or a certain number of miles. What do you expect to pay in maintenance fees for that amount of time? An extended warranty may be the more affordable choice for your fleet in the long run.
It’s true that all cars, trucks, and vans need regular maintenance. Your business vehicles are no different and may even need more care than your personal vehicle. Regular maintenance is rarely covered under extended warranties, though, so you must consider your needs and budget. Extended warranties work best when you decide you’d rather pay out monthly than all at once out of pocket. Ultimately, the choice is yours.