As I said earlier, the bottom line mission for all extended auto warranty companies is to make sales. Without new sales, they can not continue to pay out on claims. It is in the best interest of the customers that the warranty companies continue to prosper and be financially stable. There is a lot of competition in the auto warranty business, and therefore sales people will hit you with the sneakiest sales tactics imaginable.

     True Story. I heard an advertisement on the radio for an extended warranty contract. Curious to see what they were offering, I called the toll free number and asked for a quote. I was quoted over $2,000 for a warranty on my "older" (+100,000 miles) car. When I politely said no thank you, and tried to get off the phone, the salesman attempted to lower the price, and stated, "this is the warranty business, you can not call back and expect the same great price next time around". Wow, this sales guy expected me to agree to purchase a warranty over the phone and wanted my credit card number right away. I heard their ad on a major radio station. Think about how many contracts they must be selling.

     As the potential customer, you have all the rights and privileges in the game. What you say goes. You can make your decision whenever you want, at any time. If a salesman says that you have to purchase a contract right away, they are lying. No warranty company will ever refuse to sell you a contract because you did not purchase from them the first time around. Do not believe that prices will go up if you do not agree to the contract right away. Always bargain and haggle when purchasing your contract. If the salesman will not budge on price, demand better coverage at the same price. Remember that you should have no shame in trying to work the price down. They have a profit margin built in, and sometimes it is as high as 50 percent!

     If you are shopping for a used car, you will probably encounter someone trying to sell you an extended warranty contract, or you may be interested in purchasing one yourself. If your used car dealer is trying to sell you a contract, you are at an advantage. It is in the dealer's best interest to sell you a contract, even at cost. Here's why:

     Most dealers will include a short & basic warranty with all cars they sell. When it comes time to do your paperwork, they will most definitely pitch you on a warranty. These warranties are money makers for the dealer, and will take the place of the warranty that is included with your car. If you do not elect to buy a warranty, the dealer still has to pay for the one he is including with your car. You should definitely purchase the warranty extension because you have all the bargaining leverage at this point. Let the dealer know that you are educated on how the system is structured, that you are interested, but you will not want to pay the crazy markup that they have built in.