What is an extended warranty?
An "extended warranty" is a vehicle service contract offered by a new car dealer to "wrap" the new car warranty and extend beyond it. If sold outside of a new vehicle purchase, a vehicle service contract is sometimes incorrectly referred to as an "extended warranty." The automotive service contracts industry is moving away from this terminology to avoid confusion amongst consumers.
The difference is a subtle one. Warranties are provided by a manufacturer and are included with the original vehicle purchase. In contrast, vehicle service contracts must be purchased separately and can be purchased at any time. However, the earlier you purchase a service contract in the life of the vehicle, the better coverage you can usually obtain.
Learn About Vehicle Service Contracts
Click below to browse our Frequently Asked Questions:
- What is a vehicle service contract?
- How does a vehicle service contract work?
- Why do I need a vehicle service contract?
- What does a vehicle service contract cover?
- What is an extended warranty?
- A warranty came with my car when I bought it. Why do I need a vehicle service contract? Isn't my car covered by the original warranty?
- What happens if I sell my car? Is my vehicle service contract transferrable?
- Can I purchase extensions and upgrades to my vehicle service contract?
- What vehicle upkeep am I responsible for in order for my service contract to remain valid?
- Where can I take my vehicle for repairs?
- If I get a vehicle service contract, can I still work with my local mechanic?
- Do I have to pay for my vehicle service contract in full at the time of purchase?
- What if I want to cancel my vehicle service contract?
- Can my claim amounts exceed the amount of money I paid for my vehicle service contract?
- How are vehicle service contract claims paid?
- What happens to the money I pay for my vehicle service contract?
- What should I look for when considering purchasing a vehicle service contract?
- How does a vehicle service contract deductible work?
- Why should I buy a vehicle service contract now? Especially if I still have a manufacturer's warranty.
- Are auto manufacturers involved with the creation and sale of vehicle service contracts?
- What's the difference between a vehicle service contract and a manufacturer's warranty?
- Will purchasing a vehicle service contract subject me to telemarketers and mailings from companies that may not be reputable?
- How does the Vehicle Protection Association (VPA) ensure that I, as a consumer, am protected from fraud, false advertising, or other exploitive practices?
- Does the VPA provide a list of trusted organizations and businesses?
- Who can I contact if I have a problem with my automotive service contract or its provider?
If you are interest in buying an "auto extended warranty," you should know that the vehicle service contracts industry is moving away from the phrase "warranty" because it is confusing to consumers. Try searching for "vehicle service contracts" instead.