What is an extended auto warranty?

Modified on Sat, 15 Jul 2023 at 07:48 PM

Extended car warranty 101 American Auto Shield customer service claims adjuster

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

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

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