A Comparison of Extended Car Warranties

A car warranty is a type of service contract.

An extended car warranty is essentially a service contract for future wear and tear. Warranties are available for everything from the car keys to the seat fabric. Keep in mind the costs, location of service, type and duration of coverage and whether the warranty is transferable.

Manufacturer's Extended Warranty

A manufacturer's extended warranty is sold as an extension of a vehicle's factory warranty. It usually comes with the same terms as the original but at an added cost. These warranties vary in length of coverage (in years and/or miles) and in deductibles. A manufacturer's warranty can be purchased at any time during the vehicle's factory warranty limits.

Insurance Company Warranty

Tires and wheels on some cars cost thousands to replace.

Insurance company warranties are sold directly at the dealership but usually only for used cars. The costs can differ greatly, but, in most cases, the coverage is as good as the manufacturer warranty. These warranties can be purchased to cover things such as road hazards, tires and wheels, seat fabric and key replacement. Some of these warranties can be used at multiple types of repair facilities.

Warranty Company Plan

These types of warranties are often a scam. These products are sold through direct mailings or telemarketing and usually do not cover very much at all.

References

• The Unofficial DMV Guide: Extended Warranty
• U.S. Federal Trade Commission: Buying a Used Car
• Consumer Affairs: Car Warranty Scams Target Seniors

Resources

• Consumer Reports: Extended Warranties - How They Work