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