Economic Climate Boosts Auto Warranty Sales
A study last month by R.L. Polk & Co. reports that cars in the US average 9 years old. That is nearly 3 times longer than the manufacturer's auto warranty. When the factory warranty expires, drivers are then responsible for paying for inevitable vehicle repairs, which can total into the thousands of dollars. To protect them from such a financial impact, consumers are turning to extended auto warranties for their automobiles.
In the current depressed economic climate, that millions of Americans are postponing expensive purchases is not news. But delaying the decision to get a new car is not always the least expensive choice. Operating a vehicle is still costly. As more people are keeping their older vehicles, the risk is higher in confronting an unexpected, costly repair. The several thousand dollars saved by not using it for a down payment on a new car now goes into repairing a 9-year old one.
As the average age of vehicles rises, so does the popularity of extended auto warranties. With a comprehensive car warranty, a driver can both have the financial gain of delaying a new vehicle purchase, and be protected from huge surprise repair bills.
Brett Hitchcock, President of AA Auto Protection, a leading broker of auto warranties, says that "People have always valued the factory car warranty, because it means security if something goes wrong. What companies in our industry do is offer people a chance to have that security way after the factory warranty expires."
The presence of companies selling extended warranties continues to grow, which is a direct response to consumer interest in the product. The reputation of the industry, however, needs work. Said Hitchcock, "Like any other industry, ours has been stunk up by some bad eggs, but the regulatory environment is a lot different now than it was even a year ago. If a company's been around for a while, chances are it's a safe one."
The Polk study suggests that, economics aside, other factors that make drivers keep their cars include better reliability, overall higher price of new vehicles, and the practice of giving a vehicle to a friend or loved-one.
Founded in 2002, AA Auto Protection was one of the first brokers of extended warranties for automobiles, or vehicle service agreements. AA Auto Protection is committed to providing its clients with the best plans, at an affordable cost. AA Auto Protection is a national company with offices in six states, headquartered in New Jersey. For more information visit www.aaautoprotection.com