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Auto Repair Insurance: Extended Warranties: Myths And Facts

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!
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Fun Trivia on Postcards

You would be surprised at how small you would know about a certain thing, whether it is a postcard printing product or any other publicity material.

Even postcards have its more obscure side which is rarely known to the general public, and for a commonly used commercial printing product, there is surprisingly very little random facts and trivia to be found out about postcards. Usually, with postcard printing, business card printing, flyer printing, and every other printing service you can think of, the lesser known but interesting facts are those that are involved with the history or the general nature of the product itself. And this is true as well for those cheap postcards you send when you are on your vacation or receive whenever a company feels like promoting new products and giving you discounts. Let us look at some of them

The first illustrated post card was probably a joke. As discussed in different sources, postcards have already been in existence for a long time, even back when post and mail was just a budding trade. Thus, it is not hard to imagine how people used to communicate then over long distance, using cards printed with text and short messages. As for the very first illustrated card, it was most likely an inside joke perpetrated by an Englishman using a card hand-painted with a caricature of workers in the post office. Hardly the most elegant of firsts, but nonetheless an interesting pioneer for illustrated postcard mailing.

Postcards/postal cards. The general form and spelling of these two word may seem the same, but they will be nothing more than two closely related pieces of commercial printing product. That is because a postcard is fundamentally different than a postal card due to a single definitive reason which has something to do with the stamps needed. Generally a postcard would require a person to still purchase some stamps in order for them to be mailed, while a postal card comes with the stamps already printed onto its surface, which is why postal cards are usually received from the proper postal authorities.

Deltiology. Just as with anything in this world, whether perfectly normal or mundane, there is a study involved completely with postcards and their collection. Because postcards can come in such an extensive variety of different topics and genre, deltiologists are also varied in the same way. There are those who prefer to collect all things regarding postcards in general, while there are also some who collect postcards merely for their content, that is, the fact that they are postcards is irrelevant. At first you may think that such a venture cannot possibly be very popular, but you would be very much mistaken because Deltiology is said to be third in popularity, next only to stamp collecting and coin collecting.

You would be surprised at how little you would know about a certain thing, whether it is a postcard printing product or any other publicity material. Cheap postcards have been around for a very long time now, and have grown and developed in many different ways, so it is really not surprising if now and again you learn something completely new regarding postcards and their uses.
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Bad Credit Credit Cards - Simple Facts

Bad credit credit cards are certainly not going to have the best interest or fees, but this type of credit card might be the only option available if you have had past credit problems. The interest rates on credit cards for bad credit are usually much higher than on cards designed for good credit.

These types of programs are especially designed for people that have a poor financial history and do not qualify for a regular card. If you are a young consumer just starting to build credit, or if you have had delinquencies that have damaged your credit history, you probably can still qualify for credit cards that are geared to your situation.

Bad Credit Programs

Credit card programs for bad credit are available online with secure applications, First Premier Bank and Orchard Bank are two of the most popular. These programs are often divided into "secured" cards that do need a deposit and sometimes "unsecured" credit cards are available, an unsecured bad credit credit card probably will come with much higher interest rates, sometimes 15 to 30 percent and much higher participation fees.

This type of bad credit offer gives people with a poor credit score or no history a way to acquire credit or establish a financial history. If you keep your balance under the allowed limit and make your monthly payments on time, you may become eligible for much lower interest rates and fees. This just might improve your credit score.

Interest

There are can be many temptations by having a credit card and if your using credit to hold you over in tight times, remember it's only a temporary relief as the interest on bad credit credit cards is extremely high. Shop around and to find the best deal, with an interest rate that you're sure you will be able to pay. Probably the single most important factor of picking this type of card is the interest rates charged, especially for consumers who will be rolling over their balances from month to month.

Tips

The consumer must always keep in mind that credit cards designed for bad credit are extremely easy to use, so do not go over-board or you might find yourself in a worse situation with your credit standing. Check out the interest rates and participation fees before you start filling out applications. Remember don't apply for every offer there is as this will also effect your FICO score, only choose two of the best deals you can find.

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Interesting Thanksgiving Trivia

Usually when Thanksgiving gets mentioned what immediately comes to mind first are those delicious desserts and other dishes and that spectacular roasted turkey.

Well, the food is a big part of your celebration but it isn't the only component of the Thanksgiving season. Thanksgiving's really a noteworthy occasion for us to happily celebrate and thank our creator together with family and friends for blessings we have so far received.

Here are some Thanksgiving trivias that you might like to share during your celebration.

1) Sarah Hale, an editor of a woman's magazine, is credited with having Thanksgiving declared as a national holiday by writing to congress for several years.

2) The very 1st Thanksgiving was celebrated during 1621 by Pilgrims. It was also said their Thanksgiving celebration was a total of 3 days.

3) Original name/term for Pilgrims was actually Puritans.

4) Turkey wishbone is considered a charm for good luck so grab it before anybody else gets it. Have fun looking!

5) Before being harvested and sold, a cranberry must bounce at least 4 times before it is considered as not too ripe.

6) The very first meal that astronauts Buzz Aldren and Neil Armstrong ate on the moon was a roasted turkey dinner with all the trimmings.

7) 102 Pilgrims were said to have been aboard the Mayflower who were coming to America (New World).

8) Mayflower is the boat name given for the very first shipping vessel that landed in America bringing Puritans.

9) Abraham Lincoln was the President who made Thanksgiving a national US holiday and before he declared it so, Thanksgiving was celebrated whenever the Governor of a state said so.

10) Thanksgiving is always celebrated on a Thursday because this was the Puritan's mid-prayer week day.

11) Pumpkin pie was not yet served during those early Thanksgiving celebrations during the 1620's because ovens were not yet invented at that time.

12) Approved table manners for Thanksgiving were: eating with your hands; spitting on the floor; throwing bones into the hearth after eating.

13) Not everyone was traveling to the New World to settle, some of these travelers were just out to get furs and lumber to send back to England.

14) Pilgrims traveling to the New World via the Mayflower actually spent 66 days at sea before reaching land again. That's how long it was before to travel.

15) In October of 1777, George Washington declared an "All Colony Thanksgiving" because he was feeling great about his victory over Sarasota.

Thanksgiving is so much more than just great food. It's the time for family and friends to meet again in a festive mood to appreciate all the blessings given and simply to enjoy the companionship of really good people who have made a difference in your life. So have a joyful Thanksgiving!
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Florida Panther Trivia

The Florida Panther isn't just the mascot of a professional sports team, it's also a majestic and beautiful animal (but don't let one overhear you say this, it'll go straight to his head). In the wild and in captivity, Florida Panthers can sometimes be spotted by natives and tourists journeying through this Southern state. You may be lucky enough to see one, waving foolishly until you notice the cat won't wave back, when it hits you: how much do you really know about these panthers? Take our quiz to find out.

1. What are one of the things that make the Florida Panther stand out?

a. It is the biggest feline in the world

b. It is the only feline native to the United States

c. It is critically endangered

d. It had a role in the Pink Panther movies

2. Roughly how much does the average male Florida Panther weigh?

a. 150 pounds

b. 100 pounds

c. 210 pounds

d. He prefers not to answer this question

3. To what genus does the Florida Panther belong?

a. Felidae

b. Carnivora

c. Puma

d. Homo Sapiens

4. What is the greatest threat to the survival of the Florida Panthers?

a. Prey

b. Inbreeding

c. Loss of habitat

d. Overused litter boxes

5. In 1982, the panther became the state animal of Florida. Who was behind this vote?

a. Florida school children

b. The Major of Miami

c. The governor of Florida

d. The panthers wrote themselves on the ballot

6. What do Florida Panthers generally eat?

a. Just meat

b. Just plants

c. An equal balance of both plant and meat

d. They order pizza

7. Roughly how many adult panthers are there in Florida?

a. Between 50 and 70

b. Between 100 and 200

c. Between 200 and 400

d. Just one. His name is Bob.

8. How many kittens are in the average Florida Panther litter?

a. Four

b. Two

c. Six

d. Panthers don't have kittens, they only lay eggs.

9. How do Florida Panthers hunt?

a. In packs

b. In pairs

c. Alone

d. With guns

10. What is the scientific name of the Florida panther?

a. Panthera leo

b. Puma concolor coryi

c. Panthera tigris

d. Kitty Cat

Answers: 1. c. It is critically endangered; 2. a. 150 pounds; 3. c. Puma; 4. c. Loss of habitat; 5. a. Florida school children; 6. a. Just meat; 7. a. Between 50 and 70; 8. b. Two; 9. c. Alone; 10. b. Puma concolor coryi.

See how you did:

9-10 Correct: Very good. You are the cat's meow.

6-8 Correct: Not bad, you earned nine lives.

3-5 Correct: Hmm…about average. No meow mix for you.

Less than 3: Ouch. Maybe you're just more of a dog person?
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Collection of Coffee Trivia

Coffee is the favorite drink of a lot of people. But few are aware of the many interesting facts behind this popular drink. To increase your knowledge, heres a collection of coffee facts and trivia for your enjoyment:

Ever wonder how cowboys made coffee? The truth may shock you. In the old west, "cowboy coffee" was made by placing ground coffee into a clean sock. This was then immersed in cold water and heated over a campfire. When the coffee was ready, it was poured into tin cups and gulped down.

Some athletes cant enjoy coffee before they compete. The reason? Caffeine happens to be one of the substances prohibited by the International Olympic Committee. Athletes who have over 12 micrograms of caffeine per milliliter of urine are banned from the Olympic Games. This occurs after consuming about 5 cups of coffee.

Did you know that the word coffee was once applied to wine? The Mohammedans were responsible for this. When coffee became popular, it was used to replace wine in a lot of religious ceremonies. This black drink was favored since it kept the Mohammedans awake and alert while praying. To honor this strange brew, they gave it the same name that they originally gave to wine.

During World War II, coffee was referred to as a "cup of Joe since it was consumed by many enlisted men in the US Army. These soldiers were later named G.I. Joe after a famous comic strip distributed by King Features Syndicate in 1942. Since the soldiers drank a lot of coffee, it was only a matter of time before the popular phrase cup of Joe emerged.

Finally, the worlds most expensive coffee is found in Sumatra and sells for over $500 a pound. Called Kopi Luwak, this special blend is made from coffee beans excreted by the Asian palm civet. This catlike mongoose reportedly eats only the best coffee beans and its gastric juices eliminate the bitter taste. It is patently tracked by Sumatran coffee plantation workers who diligently collect every bean the animal excretes. The coffee beans are washed and later packaged as Kopi Luwak which has a sweet, smooth brew.
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Five Sharp Shar Pei Dog Trivia

Loose skin, prickly coat, small ears, unquestionable courage at home and outside.... The shar pei dog is all this and more! The Shar-Pei is an ancient breed that has called its home for centuries the southern provinces of China. Certain similarities make it a probable relative of the smooth-coated Chow Chow and the Tibetan Mastiff. This remarkable breed is now all over the world, but its odyssey started out at home simply enough with tasks like cattle herding, property guarding, and hunting assistant.

1. The Shar Pei are a brainy breed. They also make good in obedience training. The best way to maintain their interest is to vary their training routine.

2. The shar pei dog has a bluish-black tongue, just like its likely relative the Chow Chow. But if you are into show dog competitions, you may have hear many times over that spotted and all-pink tongues are "undesirable" or do not have much chance, from the judges' point of view; lavender, on the other hand, is permissible.

3. Aside from seeing extra yummy food, the only other way that a shar pei dog will get slobbery is when water gets trapped in the folds of their muzzle.

4. Just because a Shar-Pei is somewhat exotic in origin does not mean it can also live in exotic temperatures. This means that a Shar-Pei is in danger of overheating if left under the sun for long periods of time, and will also suffer if kept as an outdoor dog during cold weather.

5. Finally, let's go over this dog colorful history. Did you know that at some point, these dogs were even on the brink of extinction?

We have already mentioned the dog's peasant roots. When Communism rose to power in China, raising dogs either as pets or for fighting were considered an excessive activity. By 1950, the breed's low numbers were in big trouble.

Somewhere along the way, a few breeders in the British colony of Hong Kong acquired a few of these Chinese Fighting Dogs. Chinese businessman Matgo Law was one such fancier of the wrinkled dogs, and in 1973 he and fellow breeder C.M. Chung began a campaign to save the breed with a plea for help in Dogs magazine.

Incredible as it may seem, the founding batch sent to the US from Hong Kong were of an inferior quality than the Shar-Pei observed today. More specifically, some of the original 12 dogs imported to the United States that make up the breed's genetic foundation in this country were actually street dogs with nasty dispositions! Just the same, most Americans responded positively to the campaign. Soon enough, the Shar-Pei was like a fad in its early years in the US, with pups commanding prices that reached thousands of dollars and dog breeding ballooning without any regard for the breed's overall temperament, health, or structure.

While Chung and Law ended up with more than 2000 responses and requests, they only sent puppies to some breeders they tried to select as much as possible. Eventually, some of these early breeders would organize the Chinese Shar-Pei Club of America in order to formulate a breed standard and collaborate to improve the breed. The breed's numbers are now currently a far cry from their status when the magazine plea was put up; in 1994, the registration of 15 thousand individuals and 6600 litters was able to make the breed the 25th most popular in the US, out of 137 breeds.

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