What Is An Extended Auto Warranty

Every vehicle comes with a Warranty which will mean that the manufacturer of that vehicle will meet the costs of any repairs for the period of that warranty. However, the most important of these warranties often expire between 3 years and 36,000 miles and 5 years and 50,000 miles after the original "in-service date". See which company we recommend.

Today, such a vehicle is relatively young and auto dealers were quick to capitalize on the car owner's desire for increased protection. Their response would be to provide additional warranties beyond the manufacturer's basic warranty. This "Extended" auto warranty would give you protection after your original manufacturer's warranty has expired. Its’ purpose therefore is to protect you from the unexepected costs of mechanical failure and it exists as an agreement between you (the car owner) and a warranty company.

For example, one major repair with a significant mechanical part like your cars engine, transmission, power steering, drive axle, air conditioning, gaskets or electrical system can end up costing as much or more than the actual cost of the extended warranty. As cars break down when they want to and not when your bank account can meet the costs, smart car owners are opting for this up front protection and ease of mind.

But it is not quite this simple. Why? Because:

1. The level of coverage differs considerably from company to company,

2. The pricing differs considerably from company to company and from warranty to warranty, and

3. The terms of the contract can often limit the warranty companies liability which an ill-informed consumer may not recognize.

Therefore, as a potential purchaser, you must familiarize yourself with the terminology of the contract, the things you should look out for in this contract and the differences between the different plans. What you want is an extended auto warranty that works for you - that is aligned with your needs and your vehicle and that gives you the coverage you feel necessary at a price which is fair within the industry.

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