The traditional car buying experience is often seen as an overwhelming task. But thanks to the Web, customers can save time and enter a dealership precisely knowing what they want to buy.

How many times have you started the process by visiting different car dealerships? Purchasing a new or used car is a significant investment and you will hopefully be keeping your vehicle for awhile. You likely have certain features and options in mind, which will help narrow the scope of which models you will consider. But because you want to find the best car to meet your needs, the process can be intense and arduous.

Many car companies and dealerships are posting their inventory online so you can search for a car to best suit your needs. If you begin with the website as your first step, when you walk into the dealership, you have a narrowed list of vehicles that have the features you want, in your price range and you don’t have to waste a lot of time driving around from one dealership to another.

There are three different types of auto retail sites available for car buyers and each has its own unique advantages.

The Coast-to-Coast Dealer’s Website

When browsing online for your car, one of your primary concerns may be selection. CarMax is an online car dealership with a large inventory, located in several states across the country.

When you visit the site, you enter the make, model, price range and other details for the type of car you want. You are asked to enter your zip code, and then given a list of available vehicles at locations near your zip code. You can compare models, pricing, features, mileage, and other details.

If you aren’t sure what type of car you want, this is a good option to check out as many cars as possible in your price range.

The Local Dealership’s Website

The local dealership is probably the best option if customer service, in addition to selection, is important to you. The difference is similar to shopping at a large retailer versus the small specialty shop owned by a local family known for their contributions in the community. But whereas that small specialty shop may not have an inventory comparable to the big guys, the local dealership may not only offer a comparable selection of cars, but services that you won’t find at the larger auto retailers.

Conklin Cars is a new and used car dealer with several locations in Kansas. When working with a dealership that has several locations, you have the advantage of a large inventory, and working with specialists at each location. Customers who have visited the Salina car dealer site, for example, can also visit the company’s Newton car dealership and Hutchinson auto dealer sites online or in person to compare models, features and pricing.

But in addition to searching for cars based on brand, make, model, new, used, and even “building” the car you want, customers can also send questions to the dealerships’ parts and service technicians. Rather than running all over town to try and find the right part your car needs, or taking the car to a mechanic that may not be familiar with your car, you’ve got both covered at one location. This works well because it gives you a one-stop-shop option for not only purchasing your car, but care and maintenance after purchase.

Other notable advantages of using a local dealership include better, low-pressure sales and customer service, in addition to unique services. At Conklin Cars, sales reps are trained to create relationships with customers for any of their car buying or car service needs. For example, customers can rent a vehicle from Conklin Cars, a unique feature of this local dealership not found at many auto retailers.

Brand Name Shopping

If you have a particular brand in mind, visiting the company’s main site is probably your best option. A manufacturer’s website will offer a comprehensive look at all of the company’s offerings. Saturn, for example, is known for its low-pressure, no-haggle pricing. Like most automotive brands, the site is quite comprehensive with a photo gallery of different models, pricing, features and other valuable information to help you make an educated decision on which one of their vehicles will best suit your lifestyle.

Modern technology has created an opportunity for the car buyer to save much time, effort and stress when shopping. Depending on whether you want a vast inventory, a local resource capable of providing all of your car service needs, or you’re focused on one particular brand, beginning the car buying process online is a smart move. If you know your budget and enter the dealership with a clear decision on which cars you want to see, you’ve got the hardest part of the car-buying process covered, and all that will be left to do is make a decision and go through the paperwork.

When you have made a solid decision about which type of car will best fit your needs, it is time to zero in on the details. You will have to decide on specifics like, make, model, color, options and more.

Of course we all would like to own a car that we have chosen every last bit of detail for, be it an unusual paint job or something as practical as an ABS system.

However the more leeway you are willing to give on your preferences, the better your chances are of making a great deal on your car purchase. There’s no need to sacrifice any options that are absolutely necessary to ensure your safety and comfort while on the road, but if you are willing to be flexible as to what color and accessories are included in the package, you may just find a more reasonable deal and certainly more options to choose from. This will give you more leverage when it comes time to bargain for the final price of the automobile.

Let’s put it this way: say you have very strict requirements about your chosen car’s paintjob and rims. Or perhaps you just have to have that expensive and esoteric car stereo system. What are the chances that your car dealer has a car on stock with those exact same specifications? Fairly slim actually and if they do have what you want in stock, chances are you will have no other choice but to pay the price the dealer is asking for. Either that or find another car dealer who does carry your chosen model in stock but is willing to lower the price.

Of course if you do find the model you want with the specifications you want, you wouldn’t want the dealer to know that so you can proceed with the negotiation as if you were just not that particular about the little details.

You may want to call several car dealerships in your area and ask about your chosen car model. This will give you an idea how much of them are available so you can then plan your bargaining strategy accordingly. Keep track of the results you gather from your inquiries; make notes detailing the name and contact information of the dealer and what line of cars they carry. This will help you get a clearer picture of all the options available to you when you make your final decision.

Who hasn’t seen that popular depiction of a car salesman as a slick, smooth-talking con artist out to sell you what seems to be a serviceable enough automobile, only to have it break down as soon as you drive off the car lot? This scenario has been used in countless movies and comic strips; unfortunately it’s not very funny if you are on the receiving end of a lemon.

We’re certainly not suggesting that all car dealers are unscrupulous hucksters lying in white for the next pigeon to come along but the sad reality is that there are people who, while not entirely deceitful, may “neglect” to mention hidden defects or slap you with a surprise bill for “additional” costs. Understanding your rights as a consumer and learning how to negotiate from a position of strength will go a long way in helping you get the best possible automobile deal for your money.

When you are first making inquiries at various automobile dealerships for a car you wish to purchase, take the opportunity to get a feel for the salesperson at each of the particular branches; to test drive them so to speak. It is important to take this crucial step before you get into the nitty-gritty of bargaining.

Trust your instincts; is this person someone you will want to deal with for such an important transaction? Do they inspire trust in you and make you feel comfortable? You will want to deal with a person who shows genuine concern about giving you what you need yet informed enough to suggest better alternatives.

On the other hand, if a salesperson is impatient or too insistent or possibly even downright rude, walk away; you don’t need the aggravation and there are certainly many much more accommodating car dealerships that will help you out.

Make sure you test-drive your potential car as much as is reasonably necessary and ask all the questions you need to know no matter how trivial; a good salesperson will know that every little question is a legitimate concern and it is reasonable to expect thoroughness on the part of a customer.

Another thing to be sure of is that the salesperson is clear and straightforward in all the aspects of the planned purchase.

It’s true: a salesperson’s ultimate goal is to close the sale. But there are good, knowledgeable salespeople out there who will not be afraid to suggest a totally different solution even if it affects his commission.

The art of negotiation is a tricky, possibly long drawn-out matter and sometimes you are never really sure you got the best deal even after you’ve walked away from the bargaining table.

If you are like most buyers, you probably have a good idea of how much you are willing to spend and would like to settle the issue of cost even better you go to the dealer to check out the car. Indeed, since the advent of the Internet, most companies are even willing to quote you the actual retail price sight unseen, over the phone or perhaps through e-mail. This is in sharp contrast to only a few years ago when standard practice was to lay on as many enticements as possible to the customer before the actual bargaining started.

Of course chances are, in your inquiries to several different auto dealers or through scanning of the local ads, you may have already encountered a quoted sale price on one or more cars you are interested in. Most online car dealerships in fact, will readily give you the price knowing that this is a crucial factor in your decision to purchase a car from them. What you have to realize though, is that it may still be possible to knock a few dollars off their asking rate.

You may possibly already have a pre-conceived price point at which you are confident that you have scored a great deal. Most people though, are willing to give a little leeway on this issue as long as they feel that they will get a fair price.

The best way to prepare for the inevitable haggling that will take place at your car dealership is by being as informed as possible about current market rates for your chosen car model. Ask around several different dealerships about the car you’re interested in and ask if they offer any added-on value, like free accessories or free service checkups and towing services for example. Each dealer is different but they all have the common goal of selling as many units as possible and many have come up with some interesting solutions to help you part with your money.

Finally remember that it’s not always all about paying as little as possible; you will want to buy a car that you are totally happy with, at a fair price. Take the time to do your research and you will walk away the winner in the deal.

Lookers has acquired 10 sites from HR Owen in a move that will see the dealer group now represent the Mercedes-Benz franchise.

The consideration payable in cash will be £5m goodwill and £8.1m of fixed assets. Once the value of stock is taken into consideration, however, the value of the deal could rise to between £18m-£25m.

The acquisition is expected to add around £175m to Lookers’ annual turnover and enhance profits in the first full year of ownership.

It represents the Manchester-based dealer group’s first purchase since the drawn-out battle with rival Pendragon for Reg Vardy at the beginning of the year.

Lookers’ chief executive Ken Surgenor told Motor Trader the deal was representative of the group’s strategy to expand its range of premium brands.

So far this year Lookers has boosted the number of Land Rover sites it operates by three as well as adding two Volvo and Jaguar dealerships in a multi-million pound deal with HR Owen at the start of the year.

“Our stated strategy has been to strengthen the mix of premium brands that Lookers operates. The market is going the way of the premium brands. You can see both BMW and Mercedes strengthening their market share and our strategy is in response to those market trends,” he said.

Surgenor said that the group had been keen to add Mercedes-Benz to its portfolio and did not rule out adding to the newly acquired franchise but said that was dependent on the manufacturer and the sites that became available in the future.

“We’re delighted to be approved by Mercedes. It’s a brand we’ve wanted to represent for some time,” Surgenor added. The deal covers four Mercedes sites in Redhill, Gatwick, Eastbourne and Brighton, with the latter also selling Smart; two ChryslerJeep outlets in Hatfield and Romford; two Lexus sites in Hatfield and Brighton; and Land Rover sites in Acton and South Kensington.

Mercedes Benz continues to be one of the most exhilarating cars on the market that can offer you a multi-media experience. There are hundreds of different places you can find Mercedes Benz, and a wide variety of them as well. Whether you are looking for an older classic or a newer state of the art vehicle, you can find what you are looking for. So where do you look to find a Mercedes Benz?

The first part to finding a Mercedes Benz for yourself is determining what kind you would like. Are you looking for a used vehicle or a brand new 2007? If you are looking for a used car, you will probably have better luck looking online for the particular model you want. Car dealerships are best when looking for a newer model because it allows you to test drive the car right then and there.

You’ll also want to consider smaller things when purchasing the car such as color, manual or automatic, and what type of engine it has. All these factors play a role in which dealership or online site is going to have the Mercedes Benz that you are looking for.

If you do not want to take the time to go to a car dealership, you may want to check out Mercedes Benz’s website itself to compare prices and models. This can help you get an idea of exactly what model is best for you. It will also allow you to find a Mercedes Benz within your price budget.

When searching online some of the better places to look for your Mercedes Benz are at automotive.com, autobuyguide.com and CarSmart.com. Searching online is a quick way to find the model you are looking for and get quotes for your area. For some sites like CarSmart.com, you simply place the model of the Mercedes Benz you want along with your zip code. After doing this, you give the website your contact information and then several dealerships will contact you with your request.

This way you have options and can quickly identify which dealerships in your area have the car you are looking for. When you type in the phrase “where to buy a Mercedes Benz” in the Google search bar, there are close to ten and a half million results. By doing so, you can find multiple sites similar to CarSmart.com to receive quotes and find what you are looking for.

Mercedes Benz has been one of the elite car makes around for awhile. Because of the high demand, it is fairly easy to find multiple models that are new and used. By looking online and at dealerships, you should have no problem finding the Mercedes Benz for you.

Insurance—it’s everywhere. One can insure just about anything. Are tires an investment one needs to insure? Tire insurance, also called a road hazard policy, road hazard warranty, or tire reimbursement plan, is a rapidly growing industry in the automotive world.

Tire warranty plans pay in full or in part for the replacement or repair of damaged tires and/or rims from “road hazards.” Road hazards are defined as pot holes, debris, nails, wood, and other hazards found in the road. Curbs, sidewalks, and stone walls are not road hazards. This is an important distinction to consider when deciding if tire insurance is right for you (discussed further ahead).

Tire plans last for a specific period of time and tire wear tread-depth. Some plans last 2-3 years. Others can last 5 years or 60,000 miles. Several plans come with fixed amounts of coverage: $500 per year up to 4 years. Many contracts require three years of law school to comprehend. In terms of tread depth, a tire is usually considered worn out (and thus the plan null and void) at 2/32 to 3/32 of an inch.

Another important distinction is in the type of plan.

Tire reimbursement plans are just what they say. You, the plan holder, will be reimbursed after the claims process is finalized—usually 2-8 weeks. There is an out-of-pocket expense. These plans are often sold by new car dealerships. The prices can range from $300 to $600 dollars.

Road hazard policies operate similarly to reimbursement plans. However, some tire insurance providers, in partnership with the repair facility, may have a direct-pay relationship. Thus, there would be no out-of-pocket expense, except for applicable deductibles, and items not covered in part or in full. These plans are primarily sold by tire dealers and repairshops. The prices range from $10 to $30 per tire. They also can be based on a percentage of the cost of the tire: usually 12% to 15%.

Both types of plans have a number of variables, requiring a magnifying glass to read the fine print. Also, many are pro-rated warranties, covering only a percentage of the cost of the tire based on its wear.

Claims and Coverage: Depending on the plan, claims are initiated by the repair shop. The process is fairly smooth, although there can be a significant delay from the provider for authorization. This delay may be an hour or an entire weekend. This means that you’ll have to “ok” the tire replacement, and then hope it’s authorized for the full amount, or drive on your spare.

Some plans offer national coverage either among their service facilities or from other repair centers. Claims procedures will vary. Others only provide local coverage, or coverage at the selling facility.

Limitations: Tire insurance does not mean that everything is covered. Pro-rated warranties are based on the wear and tear of the tire. You may get 75%, 50%, or only 10% coverage depending on the tread-depth. You’ll pay the remainder. While there are plans that offer full coverage, even these have limitations, or they may conflict with a repair shop’s policies.

For example, many plans allow for a maximum of $30 to mount and balance one tire, and a maximum of $15 to repair a tire. However, sport tires often have significantly higher mounting and balancing fees—upwards of $50 per tire—and tire repair prices can exceed $90. There are also discrepancies on the tire and rim prices themselves, which in the end, may have to be supplemented by the service customer.

Although there usually is not an issue with the latter given the competitive market, the service center’s price mark up may be unacceptable to the plan provider. In this case, the service center needs to lower the price or you, the service customer, need to pay the difference—or go somewhere else. This does happen!

Rim Prices and Repairs: Rim replacement is becoming less frequent. With the high cost of aluminum wheels and sport wheel packages, tire insurers have opted to have them repaired. Repair will only be done if the rim does not hold air. What this means is that even if the rim is warped—enough to cause a vibration and even premature tire wear—they won’t replace it. Rather, they will send it out to be straightened and repaired.

Rims are replaced only if the damage is so extensive that the new tire, when mounted on the rim, won’t hold air. However, even in this case, especially if it’s an expensive sport wheel, they may still attempt to repair it.

Repairing rims is a bad option. While some rim repair is acceptable, badly warped or damaged rims will in no way ever be the same.

Alignments: If a car hits a road hazard hard enough, such as a pot hole, it’s wise to have the alignment checked. Road hazard policies and tire reimbursement plans do not cover alignments. The service customer will have to pay for this procedure.

Road Hazard Protection Positives: Some plans include tire rotations, wheel balancing, and nationwide coverage.

Myths:

1) “Can I pop all 4 tires and get a new set of tires?”

You can try. But this type of claim will trigger a number of red flags with the insurer. The policy holder will likely send out adjusters and/or require photographs. You will also have a difficult time explaining how a “road hazard” caused all 4 tire pop.

2) “New tires come with a road hazard warranty.”

New tires do come with a warranty by the tire manufacturer. However, it only covers defects in workmanship. New tire warranties do not cover punctures or damages from external sources. This is why “road hazard” protection is being pushed.

New tires are rarely defective. If there is a problem, it’s usually noticed when balancing the tire. Or, there is a drivability concern such as vibration or noise. If there’s a defect it’s generally caught right away, and the tire swapped out.

3) “It’s so cheap; it’s a no-brainer, right?”

Actually, the experts don’t agree with this statement.

The Economics of Tire Warranties: An article from the Washington Post by Terence O’Hara explains the economics of extended warranties and purchase protection plans in general. It is quite fitting for road hazard warranties. He writes:

“The decision to buy an extended warranty…defies the recommendations of economists, consumer advocates and product quality experts, who all warn that the plans rarely benefit consumers and are nearly always a waste of money.

‘[Extended warranties or purchase protection plans] make no rational sense,’ Harvard economist David Cutler said. ‘The implied probability [of having an issue with the product] has to be substantially greater than the risk that you can’t afford to fix it or replace it. If you’re buying a $400 item, for the overwhelming number of consumers that level of spending is not a risk you need to insure under any circumstances.’”

In short, road hazard warranties are a waste of money. Don’t insure that which you can afford to replace.

Numbers Game and Slim Chances: Like all insurance, tire insurance plans are a numbers game. However, this is a game you have a 98% chance of losing. Insider statistics show that the percentage of claims paid out by providers is as low a 2%.

Curbs: Another interesting note is that a lot of tire damage is caused by curbs. Curb damage is not covered under most road hazard policies. High granite curbs with sharp edges slice through tens of thousands of tires per year.

You Won’t Notice: Many people don’t even notice tire damage. Other than to see if the tires are holding air, who “really” looks at tires? Tires are subject to a whole host of external influences which cause bubbles, slices and gouges.

Despite the potential dangers of damaged tires, the damage very often does not translate into any noticeable drivability issue. The point is that if you don’t notice any tire damage you can’t benefit from the coverage.

Research Shows: Those raving about the benefits of a road hazard policy are the actual folks in the industry who stand to benefit from the sale. They’ll argue that it’s so cheap—only $10 to $20 per tire. Even so, for four tires, that’s $80 based on the “possibility,” the “chance,” of damaging a tire that meets the repair/replacement requirement protocols.

Auto Insurance: If a rim and tire has incurred significant damage, it’s quite likely that other problems have resulted as well. The first is that the vehicle may have been jarred out of alignment. Secondly, hub bearings, front end components: tie rods, spindles, ball joints, and a variety of other components may have sustained damage. In this case, auto insurance, which you are already paying for, will pay for everything—brand new.

Free Road Hazard Warranties: Many tires come with road hazard warranties FREE. In other words, in an effort to secure retailers, many tire distributors provide service centers FREE road hazard insurance. Some shops pass this on to their tire customers, others sell them. Ask if the tire “comes” with a road hazard protection policy. If not, request that one be provided at no additional charge. It’s worth a shot.

Also, some car manufacturers provide road hazard warranties FREE of charge for 12 months or 12,000 miles. If you’re buying a new car or even used, ask that the dealer provide a complimentary road hazard policy (after all the wheeling and dealing is done, of course), and just before you commit.

“What’s the best road hazard policy?” Money in “your” bank account.

How much insurance does one need? You have the big four: home, health, life, and car insurance. Then there’s a second category, which starts getting a little hazy with credit card insurance, purchase protection plans, fraud insurance and more. Extended warranties, also called extended service contracts, or extended service policies fall into the mist of this second category.

Extended warranties are supposed to pay (in full or in part) for specified repairs for a specific period of time after the expiration of the factory warranty. They can be a great value. They can also be a significant waste of money. It gets quite foggy in the details. What exactly is covered? How long? How much? Are there hidden charges?

There are numerous extended warranty companies and an even wider variety of warranty packages available: silver, gold, platinum, platinum-plus, and a host of other confidence-building words. What’s the best plan, and are extended service contracts worth the money? Extended warranties, like life insurance policies, are a numbers game. They’re a gamble. You pay $2500-$4500 for a 2 year, 100,000-mile protection plan and hope that you get at least that back in warranty repairs. The provider on the other hand, hopes to pay out less than it insured.

There are three major types of plan providers: The manufacturer, the dealership/third party, and third party providers. Each one has its assets and liabilities (discussed ahead).

What exactly is covered in an extended service plan? As mentioned above, what’s covered depends on the package purchased. Some plans only cover the power train: the mechanical components of the engine, transmission, and rear-end. Others cover the power train plus some electrical components. Still others cover electrical, advanced electrical, and computer components. Some only cover what’s listed in the contract. This is called a “Stated” or “Named” contract. This means that if it’s not stated, it’s not covered. Some cover bumper-to-bumper, similar to a manufacturer warranty, except trim pieces, upholstery, exterior components, cosmetic items, and a number of other exclusions.

Never before has the adage, “The devil’s in the details,” been so applicable.

Manufacturer Extended Plans: Extended service plans from the manufacturer are the best in terms of coverage, convenience, and quality. Coverage is similar to the warranty while the vehicle was under its original factory warranty—with similar exclusions stated above. The billing is direct, meaning you don’t have to pay out-of-pocket, except for a deductible, if applicable. Quality is great too, as an extended warranty from the manufacturer will only use factory parts. They also have money, so there’s less risk of bankruptcy.

The down side of manufacturer extended service plans is that they are not cheap. These plans are generally the most expensive, require low mileage standards, and necessitate servicing your vehicle at a dealer for coverage.

Dealership/Third Party Plans: Extended warranties from a dealership are actually from a third party insurer. These providers are “generally” reputable, but not always. However, if there is an issue (such as the warranty provider filing chapter 11, which is quite frequent in the extended service contract business), the dealer “may” step in to cover any repairs that would have been covered under the defunct plan. Also, claims are easier: billing is direct because the dealership has a working relationship with the provider, and there is usually agreement on price.

Some dealers set up their own “internal extended warranty,” which is honored by the selling dealer. This is rare, and should not be confused with a manufacturer warranty. Important: extended warranties are often passed off as “manufacturer” warranties. They’re not. This is a sales trick. Also be aware that there is a significant mark up, as the dealership is merely acting as the middle man. Lastly, extended warranty companies often go bankrupt without warning.

Third Party Plans: These plans are called third party plans because they are outside the responsibility of the manufacturer and the service center performing the repairs (unless there’s a working relationship with a repair shop as stated above).

There are hundreds of extended service contract companies. Some have good reputations, some don’t. Third party plans are frequently sold by used car dealers. You may also receive an official looking notification in the mail stating that your warranty is expiring, and directing you to call an 800 number ASAP. This is a marketing tactic by an independent warranty provider. Despite the “official” appearance of the postcard or envelope, it’s not from the manufacturer. Manufacturers do not send out reminders about warranty expirations.

Given the wide-variety of third party plans there are numerous red flags.

1) Claims: Extended warranty companies will be quick to tell you that filing claims is easy, and that the service center gets paid immediately via a credit card. Thus, there’s no out-of-pocket expense for you. However, the warranty company can’t dictate a service center’s policies. Some service centers will only accept payment from the repair customer. Thus the burden is on the repair customer to fill out the forms, contact their warranty company, and await reimbursement via check, which can take 2-8 weeks.

It is the service center’s responsibility to contact the extended warranty company to let them know what’s wrong with the vehicle and to check coverage. This process can take anywhere from 20 minutes to 20 days, sometimes more, depending on the degree of repairs and especially the amount. (See $1000 and Adjusters ahead)

Service centers and extended warranty companies frequently battle over the “fair” price of repairs. Many repair shops no longer negotiate, and just state the price, leaving the contract holder (i.e., the service customer) responsible for the difference.

2) Rentals: Rental coverage is a great benefit. However, there are fixed rates and time limits. In other words, the warranty company is not going to pay to have you drive a Mercedes-Benz, even if you drive a Benz. Rental allowances range from $25 to $35 per day. Also, rental coverage is based on the number of hours it takes to repair the vehicle, NOT how long your car has been at the shop.

3) $1000 and Adjusters: Repairs that approach $1000, or that require a significant amount of work, will be cause for the warranty company to call in an adjuster to confirm the diagnosis. This will delay the repairs by a minimum of 24-48 hours. It may cost you additional money when an adjuster is involved. You may be charged to have your vehicle pulled back into the shop for inspection, as well as for the time spent with the adjuster.

4) Tear-down Charges: In many cases, an extended warranty company will require that a particular component be taken apart for inspection to determine if the repair is indeed needed and covered. This puts the service customer in a very awkward position. The customer will have to authorize potentially hundreds of dollars of tear-down expense in the hopes that the repair is covered. If it’s not, the customer is out the hundreds in tear-down PLUS the actual repair. This does happen!

Common Myths:

1) “Extended warranties cover maintenance services and brake work.”

No. Extended warranty plans do not cover maintenance or wearable items. Brake pads and rotors are wearable parts. Maintenance such as coolant, brake and transmission flushes, tune-ups, services, oil changes, bulbs, wipers, and more are not covered.

2) “They told me it’s bumper-to-bumper, so it covers everything right?”

Wrong. Not even a factory warranty covers everything. When pitching the sale for the extended warranty, one is very often lead to believe that he or she will have nothing to worry about. This is just not true on so many levels. For example, if your bumper falls off it’s not covered.

3) “I don’t have to pay anything, right?”

Wrong. Despite the claims of 100% coverage, there are many factors involved. The labor rates, labor hours, diagnostic times, parts prices, and machine work are just a few items that often conflict with a service center’s policies. Some extended contracts only pay a maximum of $55 per hour, and only allow one half hour for diagnostic time. This is generally unacceptable to the service center, as labor rates have skyrocketed to over $100 per hour at many dealerships, and average $75 at local shops. Moreover, with the complexity of today’s vehicles, diagnostic time is at a premium. The customer pays the difference.

4) “If I have an expensive problem, I can just purchase an extended service contract.”

It’s unethical, but it’s an option many attempt. However, most service contracts have a minimum time requirement before the first claim can be filed: usually three months. Also, many contracts require that your vehicle be inspected by a service center to check for pre-existing conditions—just like life insurance.

5) “My contract lasts up to 100,000 miles.”

Only if the time limit doesn’t run out first. All extended warranty plans have a time limit. For example, a typical contract will state that the vehicle is covered for two years or 100,000 miles, which ever comes first. During the sales pitch, however, the emphasis will be on the 100,000 miles, not the time.

6) “If my car breaks, it gets fixed like new.” Actually, depending on the contract, an extended warranty company can insist on installing remanufactured or even used parts.

Items commonly not covered by extended warranties: • Any component with a pre-existing condition • Any component related to a Technical Service Bulletin (TSB) • Many components that has been updated by the manufacturer • Extra components necessary “due to manufacturer updates” to complete the repair • Trim pieces: molding, cup holders, dashboard, console, body parts, glass • Many accessories: radios, DVD players, TVs • Many expensive electronics: climate control units, navigation assemblies

Service contract positives: Some service contracts are transferable, and may thus increase the resale value of a vehicle. Many come with trip interruption reimbursement, towing and 24-hour road side. Some plans can also be financed, or have E-Z Pay Plans. Others offer a money-back guarantee.

What should you do? You’ll get lots of advice about doing the research, comparing plans, and reading the fine print. This is all sound advice. But what about doing the math?

Let’s say a plan costs $2500 for 2 years or 100,000 miles, whichever comes first. To break even you’ll need a minimum of $1250 per year in covered repairs, excluding regular maintenance. Remember covered is the vital word here.

Another way to break it down is to anticipate having to pay $104.17 per month over the next two years in “covered” repairs. Do you want to take that bet?

What could happen? You could double your money or more in repair work. You could conceivably get a new engine and transmission (or used ones anyway). You could also easily spend $2500 for a service contract, and still have to pay another $2500 for repairs, which for a variety of reasons, were not covered under your plan. Now you’re out $5000.

Alternatively, you could keep the initial $2500. In many ways all an extended warranty does is prepay for repairs. You could stick the money in the bank and collect interest. Then you could withdraw the money for repairs as needed.

Another consideration that’s rarely discussed is the cause of the problems. Many car repairs problems are the result of wear and tear, neglected maintenance, physical damage, or acts of God—such as flood damage. None of this is covered. The gamble only covers failed components.

If the vehicle you’re driving does cost $2500 to $4500 in repairs due to outright failed components, is it a vehicle you even want to consider keeping? A vehicle that needs this kind of repair work due to mechanical, electrical, or computer failures may not be worth it. The $2500-$4500 would be better spent on an upgrade to a quality vehicle rather than insuring a lemon.

There’s no question that auto repair is expensive, and even quality cars break from time to time. But do they breakdown to the tune of $2500-$4500? That’s a hefty bet on a “possibility.”

Terence O’Hara from the Washington Post makes an excellent assessment about extended warranties in general. He writes:

…extended warranties play upon a basic human trait to avoid loss, even if it means sacrificing a possible future gain…the gain is all the other things of value that a consumer could buy with the money that was spent on a warranty

What’s the best plan? Money in your bank account!

The advice is all the same for auto repair scam prevention. You’ll be told to find an ASE certified shop. Ask around. Check out several different repair facilities first. Are they clean and neat? Do they provide written estimates? Check with the BBB. Is it AAA certified? Some will even advise to “ask for the parts back.”

Traditional tips and suggestions merely put a band-aid over an infected, gaping sore. Strong antibiotics are required to address the root source of the problems in the repair industry. To provide repair customers with the above advice is like sending a soldier into combat dressed in a pink tutu. We have to stop scratching at the surface.

There has not been any “new” advice in decades. More importantly, no one has answered why car repair scams have reached an estimated 40 billion dollars per year. Moreover, why is there still no solution to stop car repair scams?

The first hurdle to conquer is the perception of the frequency of auto repair scams. Many folks just don’t believe that car repair fraud is all that bad. Some even argue that the vast majority of repair shops do an honest day’s work, and that a few bad apples are making the rest look like crooks.

This is an interesting argument, and raises a number of questions.

1) If it is only a few “bad apples,” where are they hiding the 40 billion? 2) If most repair shops are honest, why does every state warn against car repair scams? 3) Why are auto repair shops at the top of consumer complaint lists every single year, in every state?

This is even expanding across the continents. For example, just last week Australia listed car repair scams at number 4 on their top 10 consumer complaint list.

The perception of frequency gets distorted because there are a number of levels to repair scams. There are the blatant rip-offs covered in the news. For a great video visit “Repair Scams Caught on Video” @ www.repairtrust.com. Then there are the common scams such as exorbitant prices and estimates, and aggressive scare tactics to get service customers to perform services. These occur every day.

The repair scams uncovered by RepairTrust not only found the tactics listed above and more, but a powerful undercurrent of scamming at the foundation of the automotive service industry.

In reality, most car repair scams go unnoticed by the service consumer. Service customers just have no idea that they were ripped-off. This under-the-radar scamming occurs in dealerships, local shops, and franchises. Affiliation with ASE, AAA, BBB, NADA makes no difference.

An ASE patch on a technician’s arm, or an AAA or BBB sticker on the door of a service center means absolutely nothing in terms of a scam-free facility. Word of mouth recommendations can be just as devastating, as even shops that “seem” honest aren’t.

Check out “Car Repair Prices: There Are No Honest Mechanics” @ Isnare or RepairTrust for further discussion on this. Also, for NEW and FREE scam prevention tips visit the Car Repair Scam Articles @ RepairTrust.

Traditional tips are ineffective in today’s service industry. Service facilities have found new and ingenious ways of ripping people off. In truth, many of the old tips and suggestions have actually become weapons allowing service centers to indulge in car repair scams more than ever.

The car repair playing field must be leveled. Service customers need solid answers, and they need to be equipped with information, understanding, tools, and an insider’s view of the who, what, when, where, why, and how of price-gouging.

Navigating the dim underworld of today’s service centers with outdated information will cost a fortune.

Nowadays, hundreds of articles advice people on what to look for before purchasing a new vehicle. But, very few articles advice a prospective car owner on what things he or she should avoid doing.

- Never enter a negotiation zone unprepared

Even if you know nothing about cars -or negotiation for that matter- it is in your best interest to enter the "negotiation arena" well-prepared and "armed." Collect as much information as possible from a variety of sources and take a mechanical savvy friend along to the dealership of your choice. It is always a good idea to be able to inspect the car at the point of purchase; much better staying a bit longer at the dealership than having to call later only to learn that "this model has always experienced similar mechanical problems and you have not purchased any service-guarantee." Do not enter the field as an amateur; especially if you are one. Compare cars and prices, decide on the maximum available budget and stay within your price range, secure your finances beforehand and never accept whatever the price-tag says. There is always room for negotiating a better deal, even if that is in a form of a rebate or a 5-year mechanical service!

- Research is not enough for your set of car keys

You can get online, you can ask around, you struggle with the information you will be able easily to retrieve for days. But that in many cases means you are left exhausted, confused and as time passes by, possible in despair. Overwhelming yourself with a plethora of data will not do you any good. Just stop to think things through before you act. No dealer will hold a gun to your head, at least not literally, since they need you more than you need them. It is the law of supply and demand they bow to, as any good salesman, which means that at this point in time you are in control. Enjoy it and never go to a dealership unprepared or simply showing that you are unsure of your final choice. There is enough "drama" in your life at the moment; you certainly not need any additional source of anxiety. Relax, take a couple of deep breaths, keep your car possible choices under the golden number two and enter the dealerships with confidence. Exactly like window shopping. You are not buying -yet- you are just looking! Ask questions, get quotes, request price offers, ask for any extra cost that might not appear on the price-tag and make clear that you are visiting other places before you conclude. You should never give the impression that you desperately need to buy the specific car you have been asking about for the last hour. Dealers are salespeople and can "smell" need and desire, miles away. Give yourself some time to see, test-drive and inspect the car(s). Even if the dealer promises you what it might seem as an incredible deal, leave the car dealership without signing any papers or leaving a down-payment; especially if that is your first day looking. Have courage and patience -attitude here is the key- and you will conquer your goal sooner than expected. That’s the spirit you should have.