Auto warranty

An Auto Warranty is often referred to as an extended warranty on a car or as a vehicle service contract. It does not extend the coverage of the original factory warranty which is included in the car's price. It is purchase separately and provides for covered repairs or replacement costs in the event of breakdown and mechanical issue.

While car buyers are not required to buy an extended warranty, having the extra coverage can help extend the factory warranty's coverage limits - and save the buyer money in the long run.

There are two types of Extended Warranty:

1. Original Equipment Manufacturers (OEM): Offered from the vehicle manufacturer, these service plans include extra coverage for a cost on top of the factory warranty. The extended warranty from an OEM often mirrors the coverage provided when the car was brand new, but extends the coverage and mileage length.
2. Aftermarket or Third-Party Administrator (TPA's): A third-party provider, such as an insurance carrier or warranty company, offers a variety of warranty options that can be customized to the consumers' needs.