Mechanic: What You Should Know When Choosing Your Automobile Warranty Plan

Choosing a warranty plan is more than just deciding whether you want to go directly through an online provider or accept an offer from your dealership. Auto extended warranties come in many coverage levels, with some covering wear and tear or overheating, while others cover only mechanical breakdowns.

You may have heard of "bumper to bumper" coverage before, but what does it all mean? What is necessary and what is just fluff? Before you buy, be sure to iron out the details so you don't become one of the court claims.

You may be wondering, "Do I need to purchase a warranty plan, or will I be covered by my car manufacturer's warranty?" In some cases, people have purchased two-year extended warranty coverage only to find that they had already been covered just fine by their manufacturer.

According to the consumer site CarSmart.com, the best coverage is on high-end luxury sports cars, like Aston Martins, Lamborghinis, Ferraris and Rolls-Royces, which are covered until 999,999 miles. At the next tier, you're covered for five years (or 60,000 miles) if you drive a Mitsubishi, Kia, Infiniti or Hyundai.

You're covered four years (or 50,000) miles if you have an Acura, Audi, BMW, Buick, Cadillac, Hummer, Isuzu, Jaguar, Land Rover, Lexus, Lincoln, Maserati, Mazda, Mercedes, Mini, Porsche, Saab, Volkswagon or Volvo. You may want to consider purchasing an additional warranty if you're rough on your mid-range vehicle or if you buy a lower range vehicle from Chevrolet, Chrysler, Dodge, Saturn, GMC, Honda, Jeep, Ford, Mercury, Nissan, Pontiac, Suzuki, Scion or Subaru (whose manufacturer warranties only cover 3 years or 36,000 miles.) If you drive a 2008 or later GM model, then you'll be covered for 100,000 miles or five years.

There are some tricks to buying a warranty plan. On one hand, you don't need a warranty on a brand new car or a car that's less than 3 years/36,000 miles old. The manufacturer's warranty will take care of everything you need. Some new car warranties are only for 2 years or 24,000 miles from the Date of Service (the moment your car is purchased), while other new car warranties begin after the factory warranty expires, so be sure you see in writing which warranty plan you're buying.

On the other hand, you should realize that the newer the car is, the cheaper the warranty is. The warranty company bets that you're not much of a liability.

Before you choose a warranty plan, sit down and honestly think out your long and short term strategies. How are you planning to save for routine maintenance and car repairs? How long will it take you to pay off your loan? After paying their lender off, some people continue to set that money aside in a general fund to save for repairs.

Others invest in a bank CD or a money market investment account to save over the long term. Or it may be in your advantage to buy the extended warranty coverage.

Common breakdowns include: four-wheel drive differential and transfer case (with an average repair cost of $1,100), the air conditioner and heater system ($700), the brake system ($350), the cooling system ($465), drive axles and differentials ($500-$1,000), electrical systems ($800), engine failure ($2,000), fuel system ($500) and steering system ($600).