ALEXANDRIA, Va., February 4, 2014
-- It’s acknowledged among boat owners that boat engines have improved
in quality and reliability over the years, and backing that up are
recent surveys from J.D. Power reporting a steady decrease in the number
of reported problems in marine engines. So is buying an extended
service contract – also known as “extended warranties” – worth the money
today? The Boat Owners Association of The United States (BoatUS) Consumer Affairs looked at the issue and has these tips:
An extended “warranty” really isn’t a warranty: An
extended warranty (service contract) is not a warranty at all but rather
an insurance policy that pays for repairs if the breakdown, failure, or
failed component is specified as covered by the policy. On the other
hand, a new boat warranty covers much more, is included in the cost of
the boat, and offers legal protections to the boat buyer.
Not everything is covered: An engine extended
service contract covers specific items only. One BoatUS member found
this out the hard way when his third-party extended service contract
left him $1300 short after paying out of pocket for an engine control
unit (ECU) replacement job on his 30-foot powerboat. The ECU was deemed
consequential damage – and not covered – as a result of the original
problem, an overcharging alternator.
The real cost of repairs could be higher: Extended
service contracts typically come with deductibles, some don’t cover
engine removal, and they often limit haul out coverage or, in the case
of manufacturer-backed programs, will only pay if you purchased higher
levels of coverage. Check the contract’s details on how the company
handles deductibles and consequential damage.
Kill the overlap: If you decide to buy an extended
service contract, find one that begins after the manufacturer’s warranty
expires and never be pressured into buying one the same day you buy the
boat. You’ve usually got up to at least nine months to make a decision.
It should also be transferable, which adds to the boat’s value.
Manufacturer benefits: Consumers often get a better
deal on engine service contracts that bear the name of the manufacturer
because the dealer’s markup is limited. And while these service
contracts take their name from the engine’s manufacturer, independent
companies could underwrite them. However, you still are likely to get a
better deal regardless because “manufacturer” programs often have
substantially better coverage and more flexibility. Don’t forget prices
are negotiable, and some engine manufacturers sell contracts direct,
Approval needed: While it is an extra step, extended
service contracts require preauthorization before work begins. However,
avoid those that will require work to be done only at a network of
“approved” shops, or require you to use the selling dealer.
The gamble: Most defects in new boats and engines
appear within the standard warranty period, so you may not get a return
on the money you paid for an extended service contract.
How many problems will I have?: Some engine models
that have higher than average rate of problems may benefit from an
extended service contract. BoatUS members can use the BoatUS Consumer
Protection Database that contains thousands of first-hand reports on
boats and engines at www.BoatUS.com/consumer. For membership information visit www.BoatUS.com or call 800-395-2628.
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