Extended Auto Warranty 101

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 is sometimes incorrectly referred to as an “Extended Auto Warranty” or “Extended Warranty” if sold outside of a new vehicle purchase. The difference is subtle but important: Extended Auto Warranties are offered by car dealers. Auto 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; although the earlier you purchase a Vehicle Service Contract in the life of the vehicle, the better coverage you can usually obtain.