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Extended Auto Warranty 101

What is an extended auto warranty?

An An extended auto warranty is a contract offered by a new car dealer to wrap the new car factory warranty and extend beyond it. 

A vehicle service contract, commonly but incorrectly referred to as an “extended auto warranty” or "auto warranty", is sold outside of a new vehicle purchase. 

What's the difference?

The difference among the three is subtle but important: 

  1. Auto warranty:  Provided by motor vehicle manufacturers and included with the original vehicle purchase

  2. Extended auto warranty:  Offered by car dealers

  3. Vehicle service contract:  Must be purchased separately and can be purchased at any time